Stocks
This week I’ve got my eye on three electrifying stocks Tesla (TSLA), Nio (NIO), Nikola (NKLA).
Tesla (TSLA)
Up first is electric-vehicle and clean energy giant, Tesla, owned by everybody’s favourite eccentric Elon Musk. After making news for buying $1.5 billion worth of bitcoin last week, Tesla is simply another company bringing crypto to the fore and, similarly to bitcoin, shares in Tesla are known for being volatile yet lucrative for investors. On Friday, shares in the carmaker fell to the 10-week moving average line before reversing higher, signalling a possible buy position.
It comes as no surprise electric vehicle manufacturers are set to benefit from Joe Biden’s Presidency as he plans to turn the Government fleet into an all-electric powertrain. Biden, a supporter of sustainable energy, laid out his plans to rebuild America’s economy through manufacturing jobs while providing the Government with a more sustainable and efficient form of transport.
Biden’s ‘Build Back Better’ plan targets an aggressive development of electric vehicles with $300 billion earmarked for “electric vehicle technology to lightweight materials, to 5G and artificial intelligence – to unleash high-quality job creation in high-value manufacturing and technology,” as stated on President Biden’s website. Biden has also outlined a plan to replenish money for a tax credit that gives consumers $7,500 for buying an electric vehicle and build 500,000 charging stations across the U.S.
Does this green stock deserve your greenback? It is one to watch.
Nio (NIO)
The Chinese electric vehicle manufacturer, Nio, describes itself as ‘much more than a car company. Nio designs and develops smart, high-performance, electric vehicles intending to be the first “User Enterprise”’ and is often described as the Tesla of China. In 2020, Nio stocks outperformed, seeing its share price increase by 1,100% from $5 to $60 with analysts predicting a bright spark for the EV giant in 2021. Simple calculations indicate that an additional $20 increase to $80 would see Nio become the third-largest EV carmaker in the world. It is currently valued at $93.6 billion and is currently ranking fifth amongst the world’s largest automakers by market capitalisation.
With plans to enter the U.S. and European markets soon as well as additional expansion on local soil, Nio is far from stagnant – it is a young, agile and fast-growing company looking to turn a huge profit. Earlier this month it delivered an impressive 43,728 vehicles, a massive 113% increase year-on-year. And later this year, the manufacturer will begin its foray into Oslo, Norway where the company is in the process of building a team. Additional details on its entry into the region are expected to emerge soon.
With Biden in the White House, the next few months could see the easing of trade tensions between China and the U.S. and help to promote Nio on the global stage. As mentioned in the previous section, Biden’s presidency will no doubt accelerate the penetration of EVs which could mean neolithic things for the Chinese electric automotive manufacturer.
Will 2021 follow in the footsteps of 2020? Time will tell.
Nikola (NKLA)
Despite a precarious week for the Arizona-based manufacturer – the company was shrouded by fraud allegations, resulting in the founding CEO Trevor Milton leaving the company – Nikola has continued with its business plans to move into hydrogen, displaying great resilience in the face of adversity.
While Nikola boasts a modest market valuation of $9 billion, the company promises to generate billions in sales in a few years with its fuel cell electric vehicle (FCEV) predicted to generate $1 billion in sales by 2024 alone.
Earlier this week, shares in the manufacturer fell 5% following the announcement that Hyzon Motors, a competing hydrogen fuel cell electric vehicle (FCEV) maker was merging with Decarbonisation Plus Acquisition, a special purpose acquisition company (SPAC) to float.
Rumours of a potential merger with Plug Power (PLUG) could see Nikola become a hydrogen superpower which would boost the flailing share price and give Nikola the stimulus it needs to grow.
After a renewal of investor confidence following the fraud allegation in September last year, Nikola shares rose by a hefty 51.3% in January. The company’s stock posted big gains thanks to increasing federal support, general momentum for the broader electric vehicle space and signs the U.S. government would help accelerate the industry’s growth. Furthermore, Biden’s announcement to replace the Government fleet with electric vehicles boosted the manufacturer, with shares now up roughly 136% year to date.
Now the company has regained investor confidence, will 2021 be the year it coasts into the sunset or will shares suffer the same fate as its former CEO?