Today’s Research Reports on Stocks to Watch: NIO and Tesla

Chinese electric vehicle giant NIO Limited saw huge gains on the stock’s second day of trading yesterday. Shares of electric vehicle maker Tesla were little changed but did close modestly in the red. NIO has said its cars are faster and better than Tesla’s.

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Tesla, Inc.

NIO LIMITED shares were up 69.70% on Thursday at the close, as the Chinese electric vehicle company traded its second day in the market. The stock traded over 158 million shares yesterday. It was on Wednesday that NIO, which is backed by Tencent Holdings Ltd., had a $1 billion U.S. IPO. Shares rose as much as 92% on Thursday. The company’s Chief Financial Officer Louis Hsieh said on Wednesday that he attributed the low initial price to bad timing. According to the CFO, Asian markets had made domestic investors “too jittery.” The stock was priced at $6.26 per share, just one penny over the bottom of the range Nio was hoping to see. Hsieh has said, "We’re telling investors the opportunity in front of Nio is huge," he said. "China is 60 percent of the global market and growing even this year 80 percent a year even though the auto market is down." Nio is also the only premium electric vehicle in China besides Tesla, Hsieh remarked. He also noted that Nio’s seven-seat SUV is a better product at a cheaper price than the Tesla Model X. "Ours comes in at less than half the price, better features, a faster car," Hsieh stated. Tu Le, the founder of consulting firm Sino Auto Insights said, "They’ve got the first mover advantage. This is the first Chinese company that wants to be the Tesla killer." NIO now has a market value of almost $11.5 billion.

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Tesla, Inc. shares closed down a modest 0.37% on Thursday with around 6.3 million shares traded. There was no remarkable news from the U.S. electric vehicle company yesterday. It was revealed however that the company’s biggest institutional investor said on Wednesday that it was questioned by U.S. securities regulators about CEO’s Elon Musk’s plans (which have been abandoned) to take the electric carmaker private and that the chief executive needed help running the company. "He needs help, and I mean that psychologically as much as practically," said asset manager Baillie Gifford’s James Anderson. He is the fund manager of Scottish Mortgage Investment Trust. It was at the start of August that Musk had tweeted that he was considering taking the company private and had secured funding. This tweet led to massive uproar as many questioned if Musk did in fact have funding. "I don’t know what they’ll do with him, but there’s no implication that we’ve done anything wrong," Anderson said. "I think quite naturally they wanted to know whether major shareholders had any lead indication or knowledge of the tweet about ‘funding secured.’"

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Our Actionable Research on NIO LIMITED (NYSE: NIO) and Tesla, Inc. (NASDAQ: TSLA) can be downloaded free of charge at Research Driven Investing.

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