How To Buy Nio Stock – Racing Against Tesla
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Although Elon Musk and Tesla may get the attention of the Average Joe, China's electric carmaker Nio is top of mind for investors watching the race to make electric cars so integral that gas guzzlers become obsolete. Tesla, as of May 23, 2024, is selling at around $177 per share. Yet Nio is hovering near $5 per share.
Electric vehicles (EVs) are a long-term game: They won't magically become the cars everyone is driving next year. But maybe someday. And just as we don't drive a Ford or a BMW, Tesla won't be the only car on the market.
Want in? Here's how to buy.
In this article
Step 1: Finding a broker that offers Nio stock
Finding an online broker offering Nio stock won’t take long (NYSE ticker: NIO). Here are three online investment platforms that give you instant access to the stock market and help your money grow.
Stash
With Stash, investors can easily start building a stock portfolio. Create an account in under 10 minutes and be on your way to buying stocks, mutual funds, and ETFs with the confidence of Wall Street bankers.
You can join at the monthly fee level that fits your investing needs. The $3 level is just the basics, including a debit card account and a $1,000 life insurance policy. You get more features in the $3 level, including retirement accounts, and the $9 level gives you access to everything, including custodial accounts and monthly market insight reports.
Stash allows you to purchase fractional shares, so you can set up recurring weekly or monthly transfers in any dollar amount you choose. If you set up direct deposit to your Stash account, you can get access to your paycheck two days early and get your money working for you sooner.
Pros and cons
Pros
- Start investing with just $3
- Invest in fractional shares
- Custodial and retirement accounts available
- User-friendly platform is good for beginners
- Educational content
Cons
- Monthly fee ($3 to $9) lowers your ROI
- No personal advisor option
- Not for experienced investors
M1 Finance
Founded in 2015, M1 Finance is excellent for experienced investors who like to keep their money invested long-term. You can customize your portfolio and allocate stocks, ETFs, and mutual funds. This is not the platform for you if you like buying and selling. Nor is it a good choice for newbies; there’s little support to help you make wise investing decisions.
M1 Financial offers individual and joint taxable accounts, retirement accounts, and trusts. Those who opt for the premium version, with a $36 annual fee, get a custodial account and set up auto trading. There is no commission on purchases, though there is a minimum of $100 for taxable accounts and $500 for retirement accounts.
Pros and cons
Pros
- Fractional shares
- Automatic rebalancing
- Choose from an expert-curated portfolio or DIY
- FDIC insured
- Stocks and EFTs available
Cons
- Not good for beginning investors
- $100 minimum
- No mutual funds
Robinhood
Robinhood offers easy access to investors looking to buy Nio stock or any other securities on the NASDAQ or NYSE. Signing up is free; you even get a share of stock upon completing your application! For those who want more robust features, you can get premium features for a $5 monthly fee, including access to Morningstar research to help you with your stock picks, and you can also trade on margin, which is something new investors should avoid.
With Robinhood, you can purchase fractional shares of stocks to gain equity in ones you might not otherwise have access to until your portfolio is larger. Stock purchases are commission-free, and you can even do pre-market trading.
Pros and cons
Pros
- Trades are free
- No minimum deposit needed to start investing
- Fractional shares
- Perfect for beginners
- Supports cryptocurrencies
Cons
- Customer support is via email and social media only
- No mutual funds or bonds
- Only taxable accounts (no retirement or custodial accounts)
Step 2: Research Nio shares
Nio has seen its share price rise, fall, and rise again since it went public on the NYSE in 2018. It has a market cap of $10 billion and a trailing 12-month EPS of negative $1.75.
Nio price history
Although Nio has experienced volatility in the six years since its IPO, the Chinese company has seen some excellent returns. If you had invested $1,000 at $11.50 a share in September 2018, you would own 86.95 shares of Nio stock.
Using the share price of $5.24 as of May 23, 2024, your 86.95 shares would be worth $455 today. According to CNN Business, Nio's median 12-month price target is $6.69, and investment analysts have a "buy" rating on the stock.
Nio dividend info
Since it first debuted on the New York Stock Exchange, Nio has not distributed dividends to its shareholders. As a fast-growing company with more than one billion customers in China, the electric vehicle manufacturer puts its profits back into the company. The money may be better spent on research and development, which will help it beat out local competitors Xpeng and Tesla, which are popular in the Chinese market.
Best features of Nio stock
It’s impossible to determine the best stocks on the market, but experts feel Nio has the potential to be bullish long-term. Here are a few reasons why people feel confident about investing in Nio.
Nio has excellent market potential in China. There’s no shortage of competition in EVs in China, but Nio has an advantage only local competitors share: understanding their end consumers. By positioning itself in the higher-end luxury vehicle market, Nio sets itself apart from many others in the EV and autonomous driving car space.
The market for electric cars is increasing. As lawmakers worldwide commit to green energy, there’s an increasing need for more electric vehicles. This increases the potential for EV stock. Nio Limited is just one company ramping up production to meet consumer demand.
Nio has innovative ideas. From transforming the past's cold, business-like car showrooms into warm, inviting multi-level NIO houses where the whole family can hang out as they consider purchasing one of the high-end electric cars, Nio is positioning itself as an innovator in the crowded Chinese EV market. The battery-as-a-service (BaaS) model allows customers to trade their depleted battery for a fully charged one at designated locations.
A peek under the hood: Nio's cumulative deliveries stood at 495,267 as of April 30, 2024, a record-high for the company. In the fourth quarter of 2023, revenue increased 6.5% yearly to $2.41 billion. Expect higher deliveries and revenue in 2024 due to rising EV demand and better economic conditions.
New product line-up: Despite the supply chain issues, Nio continues working on new models and is ready to launch a mass-market model in 2024.
Global expansion plans: Nio is gradually expanding its presence worldwide and has already made its mark in Europe. It is already available in Norway, Germany, the Netherlands, Denmark, and Sweden, and is planning for the second expansion phase to 7 new countries. It has plans to expand to 25 markets by 2025.
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Step 3: Open an account & buy Nio shares
Opening up an account with an online brokerage is easy. Here's how easy it is on Stash. Getting started investing with Stash is simple. You can have your account set up in less than 10 minutes. You only need to know your basic personal details and a funding source to invest in NIO and other stocks.
Once you start the registration process, enter your name, email address, phone number, and street address. With all the typing, that part takes about the same time as it does to get through the following slides that ask you various questions about your financial habits and investing experience.
First, you must choose the plan level you want to select. You can always upgrade or downgrade, so don’t worry about making the wrong choice.
Now, you have to pay for it. You can pay month-to-month or for a whole 12 months at a time. It’s the same price no matter which one you choose.
Select your employment status on this next screen.
Now, it’s time to do some quick mental math to determine your net worth. Remember, this is your assets minus your liabilities. So your $20,000 car, which has a $10,000 loan, only adds $10,000 to your net worth. Again, don’t worry about getting this number spot-on.
Next, you are asked about your tax filing status. Do you file as single or married? Joint or separate?
How much have you saved for retirement already?
Now, it asks you about your bill-paying history. Do you consistently pay your bills on time or sometimes late? Choose the one that fits you best.
The next question asks about your savings and how long you could live off of just that.
Closely related is the next question: How much of your monthly income do you spend?
The following questions start to delve into your financial goals and investing experience.
What’s your risk tolerance? Slide the bar to reflect your personal feelings on financial risk.
Afterward, you’ll share how long you plan to invest the money. While this is just theoretical, remember that you should not invest any money you will need access to within five years. Keep it in a high-yield savings or money market account.
Next up is a question they have to ask to meet regulatory guidelines. Answer truthfully.
Now, type in your Social Security Number.
Read and agree to the terms and conditions. Congratulations! You’re ready to fund your account and start investing.
When you’re ready to invest, click the “invest” button, and you can easily search for stocks like Nio in the search box. When you’re ready to buy, select the amount or type in a different one and click “Buy NIO.” Easy peasy!
FAQs
How much were Nio shares when the company first went public?
When Nio went public in September 2018, the EV maker’s stock price was $11.50 per share.
How much does it cost to buy Nio shares today?
As of this writing (May 23, 2024), the share price is $5.24.
Does Nio pay dividends?
No, Nio does not pay dividends.
What is the minimum number of Nio shares that I can buy?
Depending on which brokerage firm you use to buy stocks, you can purchase less than a full share of stock. Nio Inc. is trading at a reasonable amount, but if you can’t, or don’t want to, buy an entire share, then you can use an online brokerage like Stash or M1 Finance to purchase fractional shares for as little as $1.
The bottom line
As we move through 2024, buying NIO stock, a prominent electric vehicle (EV) maker, requires careful consideration of various factors. Conducting a detailed technical analysis is crucial to understand the stock's potential. This analysis should focus on the trends in stock price and the company's position among global automakers, especially in the rapidly evolving EV market.
Investing in NIO means keeping an eye on real-time market changes. The EV industry is highly dynamic, so the stock price of EV makers like NIO can be subject to significant volatility. This demands a vigilant approach, continually monitoring the market for shifts that might affect your investment.
Given NIO's specific focus as an EV maker, the company's stock offers a unique opportunity within the automotive sector. It’s not just about the current stock price but also about understanding NIO's strategic position in the industry, technological advancements, market demand, and potential growth trajectory. Balancing these elements with real-time market data will provide a comprehensive view for those considering an investment in NIO, which is essential for making an informed decision in 2024.
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Writer
Charlotte Edwards is an educator-turned-freelance writer based in Beijing, China. She writes personal finance and parenting content for both digital and print publications around the world.
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