What’s in store for China-based electric vehicle (EV) manufacturer Nio (NYSE:NIO) in 2023? The company has a lot to prove this year but also has strong momentum in its vehicle deliveries. As Nio prepares to roll out new vehicle models, prospective NIO stock investors should take notice but shouldn’t jump into the trade until the price is right.
It’s understandable if some folks are skeptical about Nio’s growth prospects. Last year’s ongoing Covid-19 lockdowns made it difficult for Nio to produce and deliver EVs in a timely manner.
Yet, China could relax its Covid-19 restrictions this year, and there’s room for a recovery in the nation’s automotive market. Besides, Nio was surprisingly resilient in 2022 and an epic Chinese EV boom could be right around the corner.
Time Your Entry Carefully With NIO Stock
NIO stock has traded above $60, but could it revisit that level again? It’s entirely possible, but investors should wait for a signal that the intense selling pressure has abated.
It’s worthwhile to monitor key price levels as a way to gauge seller exhaustion. If and when Nio shares break above the key $15 level, this will be a sign that big-money buyers are probably stepping in.
At that point, it could be “off to the races” for NIO stock. After all, last year’s share-price beatdown was overdone. The company expanded its geographic presence in 2022 into Germany, the Netherlands, Denmark and Sweden.
Furthermore, Nio’s EV deliveries increased 50.8% year-over-year in December. That’s quite impressive, considering the macroeconomic headwinds that Nio had to deal with.
New Vehicle Launches Will Provide a Catalyst for Nio
Nio’s resilience in 2022 is notable, but what will the automaker do this year to maintain its forward momentum? Car buyers and investors can both look forward to an exciting 2023 as Nio plans to launch not just one but two new vehicle models.
Mizuho analyst Vijay Rakesh considers Nio to be “well-positioned as a leading premium EV player in China, the largest EV market globally.” Moreover, Rakesh observes that Nio “differentiates itself with its proprietary battery-as-a-service (BaaS) swapping program, which could see tailwinds as it expands into Europe.”
Still, Nio needs more than a battery-swapping program to ensure its growth this year. To that end, Nio reportedly expects to launch at least two new EV models in the coming months.
Deliveries for the EC7 SUV are expected to commence in May, while ES8 SUV deliveries are set to start in June. Rakesh noted that Nio’s ET7 and ET5 models, which were introduced not long ago, are “ramping well.” So, investors should check back to see if the EC7 and ES8 delivery numbers are up to par.
What to Do With NIO Stock
Just because you might believe in Nio’s future, doesn’t mean you have to buy the company’s shares at any price. Timing your entry properly is crucial, so watch the $15 level carefully.
If NIO stock breaks decisively above $15 with heavy buying volume, that’s a signal to get in. Otherwise, you might miss out on Nio’s multinational growth and new EV launches, and end up wishing you had invested during the early stages of the comeback.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.