Electric vehicle maker NIO has been dubbed the ‘Tesla of China’ and its share price has been climbing steadily. So, is NIO stock a buy today?
In this guide, we’ll show you how to buy NIO shares in South Africa with 0% commission and explain why you might want to buy NIO today.
Want to buy NIO shares in South Africa right away? You can get started with these 4 quick steps:
Step 1: Open an Account with Capital.com – Head to Capital.com and click ‘Trade Now’ to open a new trading account.
Step 2: Verify Your Account – Upload a copy of your passport or driver’s license and a copy of a bank statement or utility bill.
Step 3: Deposit – Fund your account with $20 or more using a credit/debit card, bank transfer, or e-wallet.
Step 4: Buy NIO Shares – From the Capital.com dashboard, search for ‘NIO.’ Click ‘Buy,’ enter the number of shares you’d like to purchase, and then click ‘Place Order.’
Step 1: Choose a Stock Broker
In order to buy NIO shares in South Africa, you’ll need a stock broker that offers trading on shares from the New York Stock Exchange. The good news is that lots of different stock brokers in South Africa offer NIO shares.
That means that you can focus on the other factors that differentiate top trading platforms, like cost, trading tools, and more. Here, we’ll review the 2 best share trading platforms you can use to buy NIO shares with 0% commission.
Our top pick for the best platform to buy NIO shares in South Africa is Capital.com. This trading platform offers trading on more than 3,000 shares from around the world. Better yet, you can trade with leverage up to 5:1 and all share trades are 100% commission-free.
Capital.com makes money on stock trading by charging a spread, which is the difference between the bid and ask price of NIO shares. For trading NIO, the spread is typically just 1.5% of your trade value. Notably, Capital.com doesn’t charge any of the fees that some other South African brokers charge, such as inactivity fees, deposit fees, or withdrawal fees.
Another reason we like Capital.com is its trading platform, which was built from the ground-up for traders. The platform comes packed with technical studies and tools like a market news feed, economic calendar, and watchlists to help you stay on top of price movements. In addition, it uses AI to detect patterns in your trading and help you improve your win rate over time.
Capital.com also caters to beginner traders with excellent educational resources. The broker offers videos to explain common trading strategies, detailed tutorials, and even a mobile app with quizzes. You can open a demo trading account with Capital.com at no cost and practise trading for as long as you like.
Capital.com is regulated by the UK’s Financial Conduct Authority (FCA) and offers exceptional 24/7 customer support. You can open a new account with as little as a $20 minimum deposit (around 285 ZAR).
- 100% commission-free share trading
- Over 3,000 US, UK, and European shares to trade
- Only requires a $20 minimum deposit
- Excellent educational resources available
- 24/7 customer support by phone, email, and live chat
- Regulated by the UK FCA
- Cannot create custom technical studies
76.25% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
AvaTrade is another top CFD broker that offers trading on NIO and hundreds of other shares. With this broker, you can trade not only shares, but also ETFs, stock indices, commodities, forex, and cryptocurrencies – all 100% commission-free. Like for Capital.com, AvaTrade allows you to trade shares with leverage up to 5:1.
One of the reasons we think South African traders will benefit from AvaTrade is the AvaSocial mobile app. This social trading platform allows you to follow other traders, start discussions, and keep up with the latest market news and analysis.
Even better, AvaSocial supports copy trading, so you can automatically mimic the positions of more experienced traders. This makes it easy to put your portfolio on autopilot and start trading like the pros with almost no effort.
AvaTrade also offers two trading platforms for you to choose between. The AvaTrade platform is available for web and mobile, and it’s very easy to use. If you want to dive into more complex technical analysis, you can trade with MetaTrader 5. This highly advanced trading platform supports trading signals, custom strategies, backtesting, and more.
AvaTrade is regulated by the UK FCA and the Australian Securities and Investment Commission (ASIC). It’s also regulated in South Africa by the Financial Sector Conduct Authority (FSCA). You can get started with just a $100 minimum deposit (around 1,400 ZAR). If you ever run into questions, AvaTrade’s support team is available 24/5.
- Trade shares, forex, and more commission-free
- AvaSocial app offers social trading on the go
- Supports copy trading with no added fees
- Integrates with MetaTrader 5
- Regulated in the UK, Australia, and South Africa
- 24/5 customer support
- Limited selection of shares from outside the US and Europe
Your capital is at risk.
Before you buy NIO shares, it’s important to know what you’re getting into. In this section, we’ll explain everything you need to know about NIO and help you decide whether the shares are a buy today.
What is NIO?
NIO is a Chinese automaker founded in 2014 by William Li. Dubbed the ‘Tesla of China,’ NIO specializes in designing electric vehicles and has embraced many of the same technologies as Tesla. For example, the company uses lithium-ion battery technology and has been developing self-driving algorithms.
One major difference between NIO and Tesla shares – and most traditional car makers – is that NIO does not manufacture most of its own vehicle designs. Rather, it relies on a Chinese state-run auto manufacturer, which helps to keep the cost of its vehicles down.
NIO went public on the New York Stock Exchange in 2018. During the IPO, shares opened at $6.26 and the company raised over $1 billion. Then in 2020, the company raised an additional $1 billion from Chinese investors and transferred some assets to a new subsidiary, NIO China, as a result.
As recently as April 2020, as the COVID-19 pandemic shut down manufacturing in China and then the US, NIO shares were trading below $3 apiece. Just over a year later, though, those same shares are trading at over $50 each. That represents a nearly 1,700% increase!
That jump was in large part due to excitement among retail investors for green energy and electric vehicle stocks. Tesla shares had a monster 2020, and NIO shares were effectively along for the ride.
At the same time, NIO did improve its bottom-line numbers and vehicle deliveries. For 2021, NIO is expecting to deliver around 90,000 vehicles and is expected to expand into Norway later this year.
At the current share price of $53.20, NIO has a market cap of over $87 billion. That makes it more valuable than many traditional car makers in the US, including Ford and GM. The company has yet to turn a profit.
NIO is not yet profitable and so does not pay a dividend to investors. It is likely to be many years before the company makes payments to shareholders.
Now that you know more about NIO shares, it’s time to decide whether they are a buy today. While NIO shares might seem expensive, we’re bullish about this electric vehicle company. Here’s why:
Improving Analyst Sentiment
While NIO was long seen as an overvalued stock on Wall Street, that’s started to change in recent months. Most recently, analysts for Citibank upgraded their price target on the stock from $58 per share to $72 per share – a potential upside of more than 35%. That’s based in part on surging electric vehicle demand in China and around the world, plus a clear path towards more vehicle deliveries in 2021.
Analyst sentiment might not seem that tangible, but it has a big impact. If more major institutional investors are buying NIO shares and recommending them to individual investors, that can increase the shares’ momentum. So, the most recent upgrade might be the start of a wave of buying activity around NIO.
Extreme Growth Opportunity
One of the most exciting things about NIO is that it’s market is gigantic. Since NIO is partnered with a state-run auto manufacturer in China, it has access to the billion-person Chinese market. While the company has barely tapped into that so far, that’s in part because only 10% of new car sales in China are electric right now.
Incentives and a global push for electric vehicles could change that – quickly. NIO CEO WIlliam Li thinks that as much as 90% of new car sales in China could be electric by 2030, which would be a tremendous opportunity for NIO.
Subscription Revenue Ahead
Another thing we like about NIO is its focus on generating recurring revenue. Instead of selling a car and then having customers – and their wallets – walk away permanently, NIO has a few tricks to keep customers hooked.
For one thing, NIO sells low-priced vehicles without batteries and then rents the batteries to owners. That creates monthly revenue at the same time that it helps make NIO’s vehicles more accessible to middle-class owners. NIO is still working on its autonomous driving technology, but that’s expected to become a subscription product, too, once it’s released.
Ready to buy NIO shares? We’ll walk you through how to make an investment using Capital.com, which charges nothing in commissions.
Step 1: Open an Account with Capital.com
Head to Capital.com and click ‘Trade Now’ to open a new trading account. Enter your email address and a new password for your account, or sign up using Google or Facebook.
71.2% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
Step 2: Verify Your Account
Capital.com is regulated by the UK FCA and complies with Know Your Customer (KYC) regulations. So, you must verify your identity before you start trading. You can complete this step online by uploading a copy of your passport or driver’s license and a copy of a bank statement or utility bill.
Step 3: Deposit Funds
Next, you can add funds to your new trading account. Capital.com requires a minimum deposit of $20, which is around 285 ZAR. You can pay by credit card, debit card, bank transfer, or e-wallet.
Now you’re ready to buy NIO shares with Capital.com. From your account dashboard, search for ‘NIO’ and click on it. Then click ‘Buy’ to open a new order form. Enter the number of shares you’d like to buy and click ‘Place Order’ to complete your trade.
NIO shares are currently trading at a lofty valuation that puts it above both Ford and GM in terms of market cap. While that valuation might not be justified based on the company’s current vehicle production, we think NIO is a growth stock that will fulfill the expectations that investors have created around it.
This company has hit its stride over the past year, rapidly ramping up vehicle deliveries. At the same time, the share of electric vehicles in China and around the world is accelerating, which is good news for NIO. In many ways, we think the title ‘Tesla of China’ is an apt descriptor for NIO – and the stock price could see the same explosive growth as Tesla shares did as the company grows.
Ready to buy NIO shares? Click the link below to open a Capital.com account today and pay no commissions when you buy and sell stocks!
76.25% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
What is NIO’s stock ticker symbol?
NIO trades under the ticker symbol ‘NIO’ on the New York Stock Exchange.
What countries does NIO sell cars in?
NIO is based in China and it mainly sells cars to the Chinese market. However, the company is expanding to Norway later in 2021 and NIO has a small presence in the US, UK, and Germany.
Is NIO a buy or sell right now?
We think NIO shares are a buy right now. This growth stock has a ton of potential to expand its market in China, particularly as demand for electric vehicles increases. NIO has been compared to Tesla before it’s stock price took off.
Does NIO have competitors in China?
The electric vehicle industry is very competitive in China and NIO has a few key competitors. Tesla, BYD, XPeng, Lucid Motors, and Youxia Motors all operate in China, and Tesla in particular is gaining market share there.
Is NIO profitable?
NIO is not profitable and the company has never turned a quarterly profit. In the first quarter of 2021, NIO lost -$0.49 per share - nearly 4 times what analysts had predicted, even as the company met expectations for vehicle deliveries.
How many vehicles will NIO deliver?
Analysts expect that NIO will deliver around 85,000 vehicles in 2021. However, it is unclear how the chip shortage will affect the company’s ability to make cars.