NIO & Tesla Stocks Zoom As Electric Vehicle Market Heats Up

Summary

• Canadian trade union Unifor and Ford Motor Company have signed a deal to repurpose an Oakville plant for the future production of electric vehicles.
• Stocks of electric vehicle makers such as NIO Inc and Tesla Inc have fared well during the pandemic.
• NIO delivered over 12200 vehicles in its third quarter of 2020.
• During its Battery Day event in September, Tesla CEO Elon Musk spoke about building an electric car that would come at a price of US$ 25,000 and perhaps be “slightly better” than its competitors.

Electric vehicle stocks NIO Inc (NYSE:NIO or NIO:US) and Tesla Inc (NASDAQ:TSLA or TSLA:US) have been on the rise this year while most mainstream automakers suffer hiccups amid the pandemic. The market share of EVs is steadily increasing across North America. The fossil fuel-dependent Canadian economy too has taken strides towards its net zero-emission goal in 2050, pushing for adaptation of cleantech and EVs.

The Canadian and Ontario governments recently invested C$295 million each in a Ford factory – a deal that Prime Minister Justin Trudeau dubbed as taking a step closer to building “a next-generation auto industry”. In September, the US-based Ford Motor Company and the Canadian union Unifor struck up a deal to repurpose an Oakville plant where five new electric vehicle models and suitable batteries would be built.

Canada was one of the first countries in the world to come up with a working electric vehicle, back in 1893. In the wake of the Trudeau government’s drive for clean energy initiatives, the country is now gearing up to get back on that bandwagon. As the popularity of electric vehicle stocks rise among investors, let’s take a closer look at the trending stocks of NIO Inc and Tesla Inc to understand their performances better.

NIO Inc (NYSE:NIO or NIO:US)

Current Stock Price: US$ 26.5

Chinese electric car manufacturer NIO Inc said earlier in October that it delivered some 12,206 vehicles in the third quarter ending September 2020, increasing by 154.3 per cent year-over-year (YoY). NIO delivered 4,708 vehicles in September alone, setting new monthly record of 133.2 per cent year-over-year growth.

Founded in November 2014, NIO Inc focuses on designing, jointly manufacturing and selling electric vehicles around the world.

NIO STOCK PERFORMANCE

Shares of NIO Inc recorded a massive growth of 612 per cent year-to-date (YTD). NIO stock surged over 780 per cent in the last six months and 88 per cent in three months.

Its scrips mostly reflect a climb through the coronavirus pandemic. In the seven months following the market crash in March, NIO shares grew about 752 per cent.

The 32.3 billion-market cap company has an average share trading volume of 86.7 million in the last 10 days.

NIO FINANCIAL RESULTS

NIO’s top line grew over 146 per cent YoY and 171 per cent quarter-over-quarter (QoQ) to US$ 526.4 million in the second quarter ending 30 June 2020. Its gross profit stood at US$ 44.3 million in Q2 2020, with a gross margin of 8.4 per cent. The company’s loss from operations stood at US$ 164.2 million in Q2 2020, down 64 per cent YoY.  

NIO Inc reported cash and cash equivalents, restricted cash and short-term investment of US$ 1.6 billion as of June 30, 2020.

Tesla Inc (TSLA: US)

Current Stock Price: C$ 461.3

Tesla Inc stocks reflect quite a headway through the coronavirus pandemic, although its operations and event calendar faced interruptions over the last seven months. Tesla’s major annual event, ‘Battery Day’ had to be pushed back from April to September due to the COVID-19 outbreak, while its main factory in Fremont, California, was temporarily shut.

After keeping car enthusiasts in suspense for long, the much-anticipated ‘Battery Day’ finally revealed Tesla’s new range of electric vehicle batteries last month. Tesla CEO Elon Musk also hinted at a future Tesla car that would be available for US$ 25,000 and perhaps be even “slightly better” than its contemporaries.

However, Musk said that some of these innovations won’t be in full production till 2022. Following the Battery Day event, Tesla stocks saw a slight slump on September 22.

TESLA STOCK PERFOMANCE

Tesla stock registered a substantial increase of over 436 per cent this year. Since collapsing to a low of US$ 72.244 (March 18) amid the pandemic-triggered market crash back in March, it climbed nearly 539 per cent in the next seven months.

Tesla shares hit a record high of US$ 498.32 on 31 August 2020, but quickly fell around the second week of September amid the global tech stock sell-off.

Its scrips climbed 225 per cent in the last six months and about 52 per cent in three months. It recorded a 10-day average trading volume of 44.9 million.

TESLA FINANCIAL RESULTS

Tesla’s total revenues of US$ 6.3 billion was down five per cent year-over-year in the light of the operational disruptions in the second quarter of 2020. But its total gross profit of US$ 1.26 billion saw a climb of 38 per cent YoY in Q2 2020.

Tesla had a free cash flow of US$ 418 million by the end of the second quarter of 2020 and had ramped up its production back to its pre-pandemic levels.

Tesla Inc is expected to release its Q3 2020 financial results on October 21.