(Bloomberg) -- Chinese electric car maker Nio Inc. now has a bigger market valuation than 112-year-old General Motors Inc., as investors bet on strong growth in electric vehicle adoption in the people's republic over the next five years.
Nio's American Depositary Receipts have surged in recent weeks, following a spate of good news - including crossing a key sales milestone, a renewed push for electric cars in China and the increased possibility of Joe Biden winning the presidency. The stock has jumped nearly 28% this week alone.
The latest surge has driven Nio's market value to $53.4 billion, according to Bloomberg data, while GM's current capitalization stands at $51.6 billion.
Electric vehicle start-ups are often said to benefit from investors' willingness to value them as technology stocks as opposed to a typical automotive manufacturer. Tesla Inc., whose valuation presently stands around $411 billion despite producing a fraction of the numbers of cars that GM makes, is a prime example.
“Tesla's swollen valuation has boosted expectations for the growth potential of its China rivals, especially as those start-ups ride on smaller base comparisons and China is mounting a strong regulatory push for EV adoption,” Bloomberg Intelligence analyst Steve Man wrote in a note earlier this week.
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