Why JPMorgan Says This 1 Electric Vehicle Stock That Is Not Tesla Could Nearly Double

For investors looking to cash-in on the rise of electric vehicles, this 1 stock could be one of the best ways to play the trend. And one analyst says this company could be the “next iconic auto brand.”

Electric vehicle stocks have been on fire this year.

Tesla (NASDAQ: TSLA) has gained nearly 437% year-to-date, Nikola (NASDAQ: NKLA) is up 125%, and Chinese EV-maker NIO Inc (NYSE: NIO) is up a whopping 598% so far this year.

But even after its monster run higher, NIO shares keep getting Buy ratings from analysts who say the stock still has room to run.

On Wednesday, JPMorgan analyst Nick Lai upgraded the stock from Hold to Buy and boosted his price target from $14 all the way up to $40 – 85% higher than the price at Tuesday’s close.

The JPMorgan analysts said NIO is likely to be “a long term winner in the premium space” in a note, arguing that EV penetration in China will be four times higher by 2025, meaning that around 20% of all new cars sold in China would be battery powered. And that’s very good news for NIO.

NIO said earlier this month that it delivered 12,206 vehicles in the third quarter, representing an increase of 154% year-over-year, and eclipsing the 11,500 total at the high end of the range the company’s management told investors to expect. 

Lai isn’t the only analyst bullish on NIO shares. 

Deutsche Bank analyst Edison Yu issued a Buy rating for the stock last month and said that NIO’s vehicles are resonating with consumers, setting the company up to become a long-term winner in the EV space.

In the note, Yu argues NIO could become the “next iconic auto brand.” And said that NIO’s referral rate by existing owners is high and its brand favorability scores rank above big names like BMW, and Mercedes-Benz, two factors that will help NIO’s footprint grow.

“The main post back we received on our bullish view is NIO’s brand does not create the same level of excitement and loyalty in China that Tesla or the German luxury auto makers command,” Yu wrote.

“We continue to see compelling evidence that NIO is increasingly perceived by customers as a high-quality premium brand with best-in-class technology and service,” Yu added. “As [EV] adoption increases and word of mouth spreads, we believe NIO can take material share in the premium segment as consumers begin to understand the value proposition and quality of its products and services.”


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