Nio Stock Forecast: NIO planning to create new, cheaper brand

Nio is building a new budget EV brand.
Reuters spoke to several individuals saying the factory would be in Chuzhou, China.
The brand is not expected to begin production until 2025.
Nio Chairman Li says company will build 1,000 battery-swap locations this year.

Clay Webster FXStreet

Nio (NIO) stock is off 1.4% in the premarket on Tuesday despite delivering new headlines. The Chinese electric automaker is said to be creating a new and cheaper EV brand to provide vehicles to the masses unable to afford its luxury lineup. Additionally, the company is building more battery swap stations.

Nio stock news: Expansion in Chuzhou

Nio is said to be secretly building a new factory for its new EV budget brand in the eastern province of Anhui, according to individuals that Reuters interviewed. The new factory will be in the city of Chuzhou, according to these unnamed officials.

Although there is no specified name for the brand, the project runs under the codenames "Alps" and "Firefly". Reuters' sources said production would begin as soon as 2025 on the new models.

In other news, Chairman William Li said that Nio will build 1,000 more battery-swap stations across China in 2023 alone. This would nearly double the existing 1,300 across the nation.

A worrying sign in US-China relations appeared over the weekend when US Secretary of State Anthony Blinken mentioned that China was considering supplying Russia with arms for its war against Ukraine. If the deal goes through, this could greatly hurt US investments in China as investors will be worried about sanctions.

Nio stock forecast

These headlines roll in as Nio stock has found itself stuck between $10 and $14 for the last few months. Now with the drop in Tuesday's premarket, Nio stock may breaking through the ascending bottom trendline, which it was sitting on last Friday. A break there might send NIO stock down to January's support level of $9.50 or even closer to November's mild support just above $9. Nio needs to break above $11.81 before bulls will jump back into this one.

NIO daily chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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