- A guide for investors who want to add NIO stock to their portfolio.
- Help with finding a broker where you can buy shares in NIO.
- Learn about how to set up your orders.
NIO Inc. (NYSE: NIO) is a Chinese company that designs, develops, manufactures and sells smart electric vehicles and provides power solutions and other value-added services. NIO was founded in 2014 and is headquartered in Shanghai. The company listed its shares on the New York Stock Exchange in 2018.
NIO’s planned listing on the Hong Kong Stock Exchange may be delayed till 2022. To buy their shares on the NYSE, follow this guide.
New to trading the US markets? Read our complete guide to buying US stock.
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NIO designs, manufactures and sells smart, connected electric vehicles. It also makes a variety of vehicle charging solutions, including home and public charging. It also offers various value-added services to its users including a service package, battery payment arrangements and vehicle financing and third-party liability and car damage insurance. The company has a strategic collaboration with Mobileye (owned by Intel) for developing automated and autonomous vehicles for consumers.
The company chose Norway, an EV hotspot, for its entry into international markets by offering a European version of ES8, its flagship electric SUV, in September 2021 and its ET7 sedan in 2022.
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Step 1: Find a broker
Find an online broker that allows you to trade shares listed on US markets. Most Australian brokers with US market access will have shares listed on the NYSE and NASDAQ.
These are just some of the factors to be aware of when looking for a broker.
Trades without commissions
You can trade commission-free on several platforms in Australia, which can save you plenty over time.
Brokers who offer fractional shares can let you buy a fraction of the share, instead of buying the entire share. This makes it easier to diversify your holdings.
Easy trading interface
It shouldn't take long to learn how to trade shares. Make sure you choose a broker that has an intuitive interface you can use with no steep learning curve.
Research and analysis
A trading platform with a robust research and analytics section allows you to make decisions based upon price history, market updates, and quarterly earnings reports. Some brokers even offer analyst recommendations.
Step 2: Transfer funds to your trading account
You will need to fund your account before you can start buying shares. You should be aware that funds can take time to clear. This means that it’s unlikely you will be able to trade immediately.
Step 3: Set your investing budget
Because shares can be volatile, you should only allocate money you are willing to lose.
You might consider investing in fractional shares. This gives you more freedom and you won't need to spend more than your budget allows.
Step 4: Decide whether to purchase shares or invest via ETFs
An Exchange Traded Fund (ETF) is regarded as a diversified investment and safer than investing in a single stock.
Vanguard FTSE Emerging Markets ETF and First Trust NASDAQ Clean Edge Green Energy Index Fund are two ETFs with exposure to NIO.
Step 5: Spec your order
There are many order types you can choose from, and you can customise the price and buying or selling point for each share. These order types can be found on many platforms.
Market orders are instructions to buy or sell shares at current market prices. However, the actual price at order execution may be different from the one that was offered to you at the time you placed the order.
This type of order allows you to automatically sell your shares at a fixed price. However, if the market is moving quickly against you, the order may not be executed if the price falls past your limit price.
A stop loss order allows you to decide the selling price. It is used often to defend a trade position from market volatility. A stop loss could be set at US$32 per share, for instance. Your stop loss order is executed automatically if the price falls below this level and your order will be filled at the next available market price.
Step 6: Submit the order
Once you've chosen a broker, and determined how you want to invest in your shares, you are ready to place your order.
Step 7: Monitor your investment
Whether you invest in shares with a speculative motive or to hold them over the long term, you need to keep track of the company’s performance and its share price movements.
Track NIO’s performance
Keep watching the company’s performance and its stock fundamentals. You can do this by watching news stories and keeping an eye out for company announcements.
A prolonged global chip shortage has affected NIO and car makers worldwide, including Ford Motor Company (NYSE: F), Honda Motor Co Ltd (LON: 0J5T), General Motors (NYSE: GM) and Volkswagen (ETR: VOW3). Many, including NIO, are compelled to curtail or idle production as a result, and the shortage resulting from pandemic-related disruptions is "unlikely to resolve soon" according to China's top car industry body.
Watch for developments in the EV markets worldwide
The actions of electric vehicle makers, and the growing popularity of EVs worldwide, is going to impact NIO because beyond EVs the company is also manufacturing a variety of chargers, which will see surges in demand as the global EV population grows.
XPeng Motors (NYSE: XPEV), Li Auto, and BYD Company are three of NIO's rivals in the domestic (Chinese) market for electric vehicles. NIO also competes with Tesla (NASDAQ: TSLA) in China, but has the benefit of battery swaps, a core of its business model.
Once it enters the international market, starting in Norway, NIO will be competing with UK-based Arrival (NASDAQ: ARVL) and Lucid Motors (NASDAQ: LCID), Nikola (NASDAQ: NKLA), Fisker (NYSE: FSR) and other US EV makers.