Nio Inc. (NYSE:NIO) has surpassed General Motors Inc. (NYSE:GM) in market value as investors continue to bet on robust growth in electric vehicle adoption in China. The Chinese electric carmaker has seen its value rise to $53.4 billion because of growth in demand for EV in the People’s Republic.
Nio delivers record 5,000 cars in October
In recent weeks, American Depositary Receipts of Nio has surged after a series of positive and good news. Some of the news includes Nio crossing significant sales milestone, a renewed push of electric vehicles in China, and the winning of the presidency by Joe Biden. In this past week alone, the stock jumped almost 28% after the company reported that it delivered a record 5,000 cars in October. This surge pushed the market value of Nio to $53.4 billion compared to General Moto’s current market capitalization of $51.6 billion.
Usually, electric car startups benefit from investors’ willingness to consider them as tech stock compared to conventional automotive manufacturers. So far, the Chinese EV maker has cumulatively delivered 63,343 cars since 2018. For instance, Tesla Inc.’s (NASDAQ:TSLA) current valuation stands at approximately $411 billion even though the company only produces a small percentage of the number of vehicles that General Motors produces. Tesla’s valuation has been on a meteoric rise this year as it continues to ramp up production up to almost 500,000 cars annually.
Nio showing massive growth potential
Bloomberg Intelligence analyst Steve Man indicated in a note early last week that Tesla’s swollen valuation has boosted expectation for the solid growth of its Chinese rivals. This is because those startups are riding on smaller base comparisons, and also China is intensifying regulatory push for the adoption of electric cars.
Wall Street analysts are betting on Nio’s growth potential, and Citi group upgraded its price target on Thursday to $46.4, which is a 23% upside potential from Thursday’s close. JPMorgan analysts recently said that Nio will be a long term winner in the EV space among Chinese brands.