We recently published a list of 11 Best EV Charging Stocks To Invest In. In this article, we are going to take a look at where NIO Inc. (NYSE:NIO) stands against other best EV charging stocks.
Over the last few years, the electric vehicle (EV) market has experienced significant growth, due to consumer demand, automaker investments, and substantial government support. In the US, the $7.5 billion from the 2021 Infrastructure Investment and Jobs Act and tax credits from the Inflation Reduction Act have also fueled EV growth.
According to the International Energy Agency (IEA), global public charging points are expected to exceed 15 million by 2030 and will increase to nearly 25 million by 2035. In the U.S., the government aims to install 500,000 public charging ports by 2030, with the total number of chargers expected to reach 900,000 in 2030 and 1.7 million by 2035.
Globally, home charging is expected to grow to over 270 million units by 2035, with more than 45% of electricity coming from public or private non-home chargers. Charging infrastructure for heavy-duty vehicles (HDVs) is also expected to grow significantly. By 2035, installed HDV charging capacity is projected to reach 2,000 GW. Policies like the EU’s Alternative Fuels Infrastructure Regulation and U.S. strategies are driving this expansion, alongside private investments.
The Road Ahead for EV Charging: Industry Growth and Challenges
According to PwC’s analysis, the number of charge points in the U.S. must grow from around 4 million today to 35 million by 2030 to meet demand. The PwC report has projected that the number of EVs could reach 27 million by 2030 and 92 million by 2040.
The EV supply equipment (EVSE) market is expected to expand from $7 billion to $100 billion by 2040, at a 15% compound annual growth rate. The market’s primary value pools are hardware, software, installation services, and charge point operators (CPOs). CPOs, which build, operate, and maintain charging stations, are expected to dominate and capture 65% of market revenue by 2040. On the other hand, hardware providers’ share will shrink from 46% today to 20% by 2040.
Despite the clear market opportunities, challenges remain, including educating consumers, financing infrastructure, and ensuring cost-effective solutions across different charging segments. Companies looking to enter or expand in the EVSE market will need to understand evolving customer needs, adopt appropriate business models, and prepare for long-term investments with a focus on strategic partnerships and potential acquisitions.
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A fleet of eco-friendly electric cars, a symbol of the company’s commitment to sustainability.
NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 20
NIO Inc. (NYSE:NIO), a prominent EV manufacturer in China, is driving growth through substantial investments in charging infrastructure and innovative technologies. The company operates one of the largest public charging networks among Chinese car manufacturers, with over 2,000 supercharging and destination charging stations across China. It is one of the best EV charging stocks to invest in.
The extensive network is not just for its vehicles. Through partnerships with other automakers like Huawei’s Harmony Intelligent Mobility Alliance, Chery, Jetour, Geely, Jiyue, Polestar, and Hongqi, the company’s charging facilities are accessible to a broader range of EVs. The approach enhances its market visibility and boosts revenue by increasing the use of its charging stations, with more than 80% of current users driving non-NIO vehicles.
The company’s innovation extends beyond charging with its Power Swap technology. The system allows drivers to swap out depleted batteries for fully charged ones in just three minutes at designated stations.
With nearly 4,000 Power Charger Stations, 23,256 chargers, and connections to over 1.6 million third-party chargers, it has conducted over 51 million battery swaps. The company has also established 78 Power Journeys routes in China and two in Europe, which makes its technology more accessible to international customers.
As of September, NIO (NYSE:NIO) had 2,552 battery swap stations in China, including 837 situated along highways. The company plans to expand this network to cover over 2,300 counties by the end of 2025. Additionally, a recent partnership with Suzhou Energy Group, a state-owned Chinese enterprise, will support the growth of the company’s charging and battery swap infrastructure, virtual power plants, and zero-carbon stations.
In the second quarter, the company reported revenues of RMB 17,446.0 million (1 RMB = US$0.14 as of September 9), a significant increase of nearly 99% year-over-year and 76% from the previous quarter. Vehicle deliveries also surged, reaching 57,373 units, which is nearly 144% higher compared to the same period last year and almost 91% higher than the first quarter of 2024.
In the second quarter, 20 hedge funds held positions in NIO (NYSE:NIO) worth $82.117 million. As of Q2, Point72 Asset Management is the most dominant shareholder in the company and has a position worth $26.89 million.
Overall NIO ranks 4th on our list of the best EV charging stocks. While we acknowledge the potential of NIO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None. This article is originally published at Insider Monkey.