Nio (NIO) has embarked on an ambitious plan as it seeks to expand its battery swap station network. The Chinese manufacturer plans to install over 700 battery swap stations this year, revising the initial target of 500. It also plans to install 600 such stations in China from 2022 to 2025.
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Nio plans to have a network of over 4,000 battery swap stations worldwide by 2025, with around 1,000 stations outside China. The expansion drive is part of its push to provide a better service experience to its growing user base. In addition, the company says its charging and swapping system will be available to the broader auto industry and electric vehicle users. (See Nio stock charts on TipRanks)
Nio has built 301 Power Swap stations to date. It also has 204 Power Charger stations and 382 destination charging stations in China. The Chinese manufacturer has also completed 2.9 million swaps. By 2025 it plans to have 90% of its users living less than 3km away from a battery swap, an improvement from the current 29%.
Citi analyst Jeff Chung recently reiterated a Buy rating on NIO with a $72 price target implying 58.1% upside potential to current levels. The analyst is optimistic about the company’s prospects after management hinted at month-over-month growth lying ahead for the company.
In June, Nio delivered 8,083 units, which is towards the upper end of the management guidance and affirms the underlying growth. While the industry continues to face chip shortages, the analyst expects supply constraints to impact growth for a short period.
“Management expects a sequential MoM and QoQ sales volume growth into 2H21E for NIO; however at this stage it is rational to give an extremely conservative forecast between 7k – 8k per month into 3Q21E,” Chung said.
Consensus among analysts is a Strong Buy based on 9 Buys. The average Nio price target of $64.22 implies 41.05% upside potential to current levels.
NIO scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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