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Electric vehicle market is growing at a faster rate, especially in the United States as the government is focusing towards their national goal to attain net zero emissions in upcoming years. This might render the EV industry one of the major markets in future, however, companies need to tackle several challenges before reaching the heights in the sector.
EV Companies Enhancing Their Products
NIO Inc (NYSE: NIO), a chinese automobile maker, saw their shares plunged by over 3% in the market yesterday. Currently, NIO stock was trading at the market price of $9.79 at the publication time. Cause of the decline remains unclear, but it might be the pressure of the company’s upcoming earnings report. However, the latest news regarding their battery plant may help them move to a better position.
Reuters reported that the company is planning to build a battery power plant focused on cylindrical cells similar to the ones Tesla is producing. The move may help them eliminate their reliance on Contemporary Amperex Technology Co. Limited (CATL), a battery manufacturing company. Additionally, NIO Inc is planning to open a factory in Chuzhou to produce budget EVs.
According to a source Reuters talked to, the facility will produce 40 GWh batteries which are able to power over 400K long range EVs. Cylindrical batteries are better than the prismatic batteries considering their cost-effectiveness and enhanced energy density.
Currently, Tesla is leading the EV market. The company is planning an expansion of their Nevada facility. They plan to produce 100 GWh batteries following the new initiative. At present the capacity allows them to make 37 GWh of battery cells. The shift would be massive considering the EV maker would offer 4680 cells, much better than the 2170 cells they are producing currently.
The US is focused on going carbon negative in future and believes that Tesla can play a much bigger role in future. The New York Times recently reported that the Biden administration is emphasizing on battery powered vehicles in the nation. Furthermore, the Elon Musk-backed company accounts for over half the EV charge points across the nation.
Tesla has announced their plan to open their network in the US. If that happens, the company would become eligible for a $7.5 Billion grant from the Congress as a part of a bipartisan bill passed in 2021, reports The New York Times. As of now, the company owns 17,700 fast chargers out of 29,000 spread all over the United States.
NIO Stock Price Action
Technical indicators are indicating a choppy momentum in the stock. We can see the price is moving in a similar pattern it created between June to September 2022. Average True Range is moving around 0.6, indicating reduced volatility in price currently. The Chaikin oscillator highlights the same as the indicator appears balanced at the time. Fib retracement shows NIO stock holding support at around $8.7 and a resistance of around $12.
Growth in the EV market may appear imminent, but it has to go through challenges including reliance on rare metals like lithium, which also render shipment of EVs a bit difficult across countries. Currently, only a few shippers are qualified to move electric vehicles internationally.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
