There’s not much arguing on the matter anymore with most agreeing that the future of the auto industry lies with electric vehicles (EVs).
Between 2022 and 2030, Mizuho analyst Vijay Rakesh projects BEV (battery electric vehicles) sales will grow at a CAGR (compound annual growth rate) of 22% globally and could be “resilient to macro risks from higher interest rates as the overall commercialization runway remains secular.”
Right now, China is the segment leader, representing roughly 64% of all BEV sales with Europe behind at 19% while the US claims a 10% cut.
And it is for one of the big Chinese players that Rakesh has high hopes this year. “We see Nio (NYSE:NIO) well-positioned as a leading premium EV player in China, the largest EV market globally,” said the 5-star analyst. “We believe NIO differentiates itself with its proprietary battery-as-a-service (BaaS) swapping program, which could see tailwinds as it expands into Europe, the second largest EV market.”
There are catalysts ahead to look forward to; At least two new models (the EC7 and ES8) are launching this year – deliveries for the new EC7 are slated to kick off in May, followed by deliveries of the ES8 in June – and come in the wake of the recently released ET7 and ET5, both of which are “ramping well.”
Rakesh also believes the end of the zero-Covid policies in China “could spur spending and help drive better than expected demand in 2023.”
Rakesh does note some “key risks” to NIO’s…
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