Chinese multinational auto manufacturer, Nio (NYSE:NIO), has announced a new partnership. The stock rose more than 11% yesterday.
Yesterday, Nio, through its energy business unit, signed a strategic partnership with China’s third-largest oil company. The partnership, with China National Offshore Oil Corporation’s (CNOOC) petroleum refinery subsidiary, CNOOC Refinery, is aimed at building charging and battery swap infrastructure.
These swapping stations will enable the changing of a car’s battery within minutes, less time than it takes to completely charge a battery.
Details of how many electric vehicles charging and battery swapping infrastructure will be built have not yet been disclosed.
With the support of a partner, Nio will be able to invest more capital to boost production, thereby enhancing sales and bottom line. It should be noted that Nio and CNOOC Refinery are already working together in several Chinese provinces and cities.
Nio Closer to Meeting Year-End Goals
Nio announced yesterday that its 1,500th power swap station is now active as it continues to deploy power swap stations across the globe.
In February, Nio set the goal of adding 1,000 battery swap stations by year-end in China, taking the overall total number of stations to 2,300. As Nio nears the end of 1H23, it has 800 remaining stations to build before year-end to meet its forecasts.
In mid-June, the company said that it would not provide free battery exchange services anymore for new customers.
Nio’s CYVN Investment Reduces Tencent’s Share
Last week, Nio received an investment of $738.5 million from CYVN in exchange for 84.69 million newly issued shares. CYVN, majority owned by Abu Dhabi government, is an investment vehicle focusing on advanced and smart mobility.
With these agreements, CYVN holds 7% of NIO stock issued and outstanding.
Is Nio Stock Expected to Rise?
Nio stock price saw a significant 11% surge in a single-day trading yesterday as investors cheered the partnership. In the past year, NIO stock has lost 58% based on broader industry factors impacting company performance. With the recent partnerships and investments, the stock’s 5-day gain stands at 7%, thereby raising questions if the stock is strengthening ground for future gains.
Of the 11 Wall Street Analysts covering NIO stock, seven rate it a Buy while four have a Hold rating thereby taking the consensus rating to Moderate Buy. The average analyst price target stands at $10.3, implying a 10.6% upside potential from current levels.
Last week, Bank of America Analyst Ming-Hsun Lee reaffirmed his Buy rating on the stock with an $11 price target implying a 17.8% upside potential from current levels.
Morgan Stanley Analyst Tim Hsiao maintained his Buy rating on the stock with a $12 price target implying a 28.5% upside potential from current levels. He cited the company’s strength after it maintained volume and margin guidance in its earnings call. The firm expects revamped sales strategies to give another boost to sales.
