On Thursday, Nio (NYSE:NIO) will release its fourth-quarter and full-year results. It will be one of the most anticipated reports in the electric vehicle (EV) industry because Nio is Tesla‘s (NASDAQ:TSLA) closest rival in China, the world’s largest EV market.

It was one of the most anticipated electric vehicle stocks to debut on the U.S. stock market last year until the firm ran into a slew of negative factors. These factors included an abrupt fall in deliveries in October, a government subsidy reduction in China at the start of this year, and the prospect of Chinese equities being delisted from U.S. exchanges, to name a few.

Momentum growing

Momentum for Nio stock grew steadily until last week when new developments in China began to contribute. As a result, the electric vehicle maker started this week on a low note; Nio stock tumbled Monday morning. Is it an opportunity for you to buy the stock before earnings?  Consider what Nio’s earnings report is likely to look like before you take any action.

Nio might face lower gross margins and more significant losses due to the intense ongoing cost pressures on automobile producers and electric vehicle manufacturers in particular. For example, the costs of essential materials like nickel and critical components like batteries have skyrocketed to such heights that Tesla raised the prices of its vehicles in the United States and China twice in little more than a week.

Not raising fees

On the other hand, Nio just confirmed that it would not raise its fees.  One of those possibilities is to raise the cost of its battery-as-a-service (BaaS) subscription. Customers may buy a Nio vehicle without batteries for a lower price.  Then, they can charge or replace batteries on demand for a monthly charge. During the earnings conference call, investors should pay attention to any updates on this program.

Another thing to consider is the vehicle’s delivery numbers. We already know that Nio manufactured 25,043 automobiles in Q4. Still, it may fall short of that amount during the first quarter.  If so, it may be owing to a dismal January and February in which it delivered only 15,783 electric cars.

Future outlook

That shouldn’t be a significant worry since almost every EV start-up is having trouble scaling up production. What matters is that Nio will begin deliveries of its flagship ET7 automobile on March 28. In addition, customers may reserve the mid-size ET5 vehicle. It also has plans to introduce another model and expand into at least three European nations by the end of 2022.

There’s no reason why Nio’s stock shouldn’t rise if it can keep to its expansion plans.

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