NIO (NYSE:NIO), one of many biggest EV manufacturers in China, appears to be like to be on the radar of Cathie Wood and her ARK Invest fund. Within the sunshine of a confluence of things, we mediate that NIO is at possibility of became a piece of the ARK Invest ETFs soon.
Cathie Wood had expressed decided sentiments about NIO in a March interview with Industry Insider:
“I in actuality had been very impressed by China’s sort out electric vehicles each from an environmental level of glimpse and a technology level of glimpse.”
She had then gone on to ticket that her crew became as soon as having a peep at NIO and other Chinese EV companies, at the side of Xpeng (NYSE:XPEV) and AutoX. Pointless to command, this observation on its dangle would no longer dispute the entire lot of our thesis. Given the emerging market dynamics, we mediate that ARK Invest may perhaps per chance be compelled to incorporate NIO and other Chinese EV stocks. Let’s delve deeper.
Deutsche Bank penned a ticket no longer too prolonged ago, warning of a modest equity market correction ahead. After this correction though, the German bank believes that equities will rally strongly, led by growth stocks. Pointless to command, with a P/S ratio of 18.51, NIO is an emblematic growth story. For reference, Tesla’s (NASDAQ:TSLA) unique P/S ratio is 25.43. Due to this, when coupled with a need of upcoming bullish developments, we mediate that the NIO inventory can generate outsized positive components in 2021 and beyond, thereby necessitating its inclusion in the ARK ETFs.
So, what are these bullish components that necessitate NIO’s inclusion in ARK ETFs? First, as we notorious in a most smartly-liked post, NIO secured a profitable partnership with Sinopec – China’s largest community of fuel stations – for the deployment of its 2d-technology Battery Swap stations. The sprint would enable NIO to dramatically scale up its Battery Swap 2.0 residence deployment across China with Sinopec’s assistance. As an illustration, the company now hopes to deploy at least 5,000 such stations across China by 2025. Thru this sprint, NIO may perhaps per chance be in a residence to lock in a enormous need of reward and future customers to its ecosystem, thereby increasing a monopoly of kinds in the biggest market for electric vehicles. NIO will most certainly be tapping additional monetization avenues by opening its EV charging community to other OEMs in China, as became as soon as the most smartly-liked case with Ford’s (NYSE:F) Mustang Mach-E. Moreover, NIO is decided to formally unveil its plans to enter the EU in early Would possibly perhaps presumably presumably, paving the formulation for the company to became a world story and never pretty a Chinese one. At closing, the company is ramping up the annual means of its reward plant – in-built collaboration with JAC – to 300Ok items by the tip of 2021.
Within the sunshine of this encouraging bullish outlook, we mediate that it’s only a topic of time when NIO shares became a piece of the ARK ETFs, thereby unlocking a enormous source of marginal inflows.