We recently compiled a list of the 11 Best EV Stocks To Buy For The Long Term. In this article, we are going to take a look at where Niu Technologies (NASDAQ:NIU) stands against the other EV stocks to buy for the long term.
The Challenges of EV Adoption and the Promise of Solid-State Batteries
On August 30, Mark Fields, former Ford CEO and President joined CNBC’s ‘Squawk Box’ to discuss the challenges facing electric vehicle (EV) adoption. Fields pointed out that early enthusiasm for EVs was driven by automakers and government regulations, but mass adoption is proving more difficult. Consumers are hesitant due to several factors including the high cost of EVs, the lack of visible and convenient charging infrastructure, and the slow charging times compared to gas refueling.
Fields suggested that automakers need to offer more affordable EVs and expand hybrid offerings while working towards breakthroughs in battery technology, especially solid-state batteries. These batteries could eventually reduce charging times to match the convenience of filling up at a gas station.
Fields commended his former company’s strategy as it involves focusing on hybrid models to ease consumers into EV technology without the range anxiety that comes with current models. He noted that automakers are also facing financial challenges in the EV space, as shown by his former company’s recent writedowns.
He emphasized that while automakers are working on delivering low-cost EVs, the real game-changer will be the development of solid-state batteries, which could significantly improve charging times and consumer convenience.
Exploring Three Scenarios for the Future of EVs
Despite the challenges, the EV industry seems inevitable and is poised to grow over the next few decades. We discussed the International Energy Agency’s (IEA) EV outlook in our article about the best EV stocks according to short sellers. Here is an excerpt from it:
“The IEA’s Global EV Outlook 2024 examined the potential paths to electrifying road transport by 2035. The report presents three scenarios: the Stated Policies Scenario (STEPS), the Announced Pledges Scenario (APS), and the Net Zero Emissions by 2050 Scenario (NZE). The STEPS considers current policies and market trends, the APS assumes that all government pledges will be fully implemented on time, and the NZE outlines a pathway to achieve net zero CO2 emissions by 2050.
The projections show that the global EV fleet could grow significantly by 2035. Under the STEPS, the number of EVs is expected to increase from less than 45 million in 2023 to 525 million by 2035. In the APS, this number could reach 585 million, while the NZE Scenario projects a more ambitious growth to 790 million EVs by 2035.
The report also discussed the growth of electric light-duty vehicles (LDVs), buses, and two/three-wheelers (2/3Ws). LDVs, which include passenger cars and light commercial vehicles, are expected to remain the largest segment of the EV market. Electric buses and 2/3Ws are also projected to see significant growth, especially in regions like China and India, where policy support is strong. However, achieving full electrification of these segments will require continued policy support and technological advancements.”
Moreover, governments worldwide are pushing for increased EV production due to environmental concerns, with the U.S. making significant moves in this direction. On July 11, the Department of Energy (DOE) announced $1.7 billion in grants to support the conversion of 11 auto manufacturing plants in eight states to produce electric vehicles and their components. This is part of President Biden’s “Investing in America” initiative, which is aimed at protecting union jobs and giving a boost to EV manufacturing.
The program is funded by the Inflation Reduction Act and will preserve over 15,000 union jobs and create nearly 3,000 new ones, which will support the production of EV components like batteries and electric motorcycle parts.
Our Methodology
For this article, we used screeners and ETFs to identify 22 EV manufacturers with a market cap of above $50 million and narrowed our list to 11 stocks with the highest average analyst price target upside, as of September 11. We took analyst comments mostly from The Fly and TipRanks. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An avid cyclist riding a sleek electric motorcycle on a rugged city street.
Niu Technologies (NASDAQ:NIU)
Average Analyst Price Target Upside as of September 11: 22.75%
Number of Hedge Fund Holders: 4
One of the best the best EV stocks to buy, Niu Technologies (NASDAQ:NIU) offers a diverse portfolio that includes electric motorcycles, mopeds, bicycles, and kick-scooters, designed to meet various urban travel needs. The lineup features several series such as the RQi, NQi, MQi, SQi, UQi, and Gova for scooters and motorcycles, the KQi series for kick-scooters, and the BQi series for e-bikes.
In late 2022, the company introduced the BQi-C3 Pro Electric Urban Commuter Bike, known for its dual battery system that allows it to reach speeds of up to 28 MPH and cover distances of 40 to 60 miles on a single charge.
Building on this momentum, the company launched its first fully electric dirt bike, the NIU XQi3, in late 2023. The model caters to both urban and off-road use, featuring a robust 72v32Ah LG lithium-ion battery and a peak power output of 8000 watts. Additionally, in September, the company announced its plan to roll out the KQi 100 series of electric kick scooters, which will be available at major retailers such as Walmart, Best Buy, and Kohl’s.
A key development in Niu’s (NASDAQ:NIU) growth strategy came in July with a significant retail expansion. The company partnered with Best Buy to distribute its electric kick-scooters and e-bikes in over 800 stores across the United States. It aims to increase the visibility and accessibility of the company’s products, promote eco-friendly transportation, and make a substantial impact in the urban mobility sector.
In August, the company reported a 13.5% increase in revenues year-over-year, reaching RMB 940.5 million. During the same period, sales of e-scooters surged by 20.8% year-over-year, with a total of 256,162 units sold.
The number of franchised stores in China also grew, reaching 3,124 by June 30. According to CEO Dr. Yan Li, new product launches this year have been successful, contributing to over 50% of the company’s growing domestic sales in the first half of the year. It is this success that shows the company’s effective approach to meeting diverse consumer demands and strengthening its position in the Chinese market.
Niu (NASDAQ:NIU) has received a consensus Buy rating from 3 analysts. As of September 11, the average price target of $2.22 has an upside of 22.75% to the present levels.
According to our database, 4 hedge funds held stakes in Niu (NASDAQ:NIU) in Q2, with positions worth $3.065 million. With 1.13 million shares of the company, valued at $1.966 million, Polunin Capital is the largest shareholder of the company, as of June 30.
Overall NIU ranks 9th on our list of the best EV stocks to buy for the long term. While we acknowledge the potential of NIU as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NIU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.