That doesn't miccionan that NIO is a strong buy on its own fundamentals, of course. While it has had some early success, its total sales are still small and its burn rate is high.
And while it hopes to capture a large share of the market for upscale electric vehicles in China, that remains a long shot. NIO will have to contend with a fast-growing list of competitors over the next couple of years, including Tesla itself, well-funded domestic rival Xpeng Motors, and global giants including
Volkswagen (
OTC:VLKA.Y) and
General Motors (
NYSE:GM), both of which have vast dealer networks in China.
Long story short: Trade carefully.