China-based electric vehicle company Nio (NYSE:NIO) kicked off the new year by reporting deliveries more than doubled in 2021, causing NIO stock to pop nearly 6% on the first trading day of the year. While shares pared those gains today, NIO stock is likely to do well in 2022 if the EV maker can continue growing at a fast clip.

2021 was a rocky year for Nio. The company was plagued by production problems thanks in part to Covid-19 and the global shortage of semiconductor chips. Unable to hold onto its huge 2020 gains, NIO stock lost 35% for the year and fell almost 20% in December alone.

Looking forward, though, Nio shareholders have reason to be optimistic. In addition to strong delivery numbers, supply problems are starting to ease and the company has an innovative battery-as-a-service (BaaS) business model.

Nio Reports Record Quarterly Deliveries

Nio posted its latest delivery numbers on Jan. 1, which showed some impressive growth.

For the month of December, the EV maker delivered 10,489 vehicles, or nearly 50% more than it did in December 2020. Fourth-quarter deliveries increased 44% year over year to 25,034, marking a new quarterly record. And full-year deliveries rose 109% to 91,429 vehicles.

Granted, Nio is far behind companies like Tesla (NASDAQ:TSLA), which reported 308,600 vehicle deliveries in the fourth quarter alone. Cumulative deliveries of Nio’s ES8 flagship electric SUV, ES6 electric SUV and EC6 electric coupe now stand at 167,070. However, the pace of Nio’s growth is impressive, particularly considering the challenges the company faced in 2021.

Growth in 2022 should be bolstered by the debut of the ET7, the company’s flagship electric sedan, set to launch in March. Nio also plans to begin delivery of its ET5, a mid-sized premium sedan, in September.

Battery As a Service Sets Nio Apart

I confess that one of the things that I like about Nio is its BaaS service. BaaS is an alternative to battery charging stations. With BaaS, drivers pull into a battery-swapping station where they can exchange a depleted battery for one that’s fully charged.

The process takes less than five minutes. And, best of all, BaaS technology makes the cost of an EV up to $10,000 cheaper, according to Nio.

Currently, Nio has more than 700 battery-swapping stations in China and is in the process of expanding in Europe. It plans to have more than 4,000 such stations around the world by 2025.

The BaaS technology is so important to Beijing that the government provided some generous subsidies to the company. China’s new energy vehicle subsidies apply only to vehicles priced under RMB300,000 ($46,000). All of Nio’s models cost more than that. However, the government made an exception for vehicles that contained battery-swapping technology, such as Nio’s.

China’s Ministry of Finance recently said it will cut EV subsidies by 20% this year, which is obviously a negative for Nio and other EV makers. Yet, China maintains its goal of having EVs account for 20% of the country’s auto sales by 2025, so it may be forced to extend the subsidy support again to meet its target.

The Road Ahead for NIO Stock

NIO stock is around $32 today, but it was trading above $60 a share less than a year ago. Can shares of the Chinese EV company recover to those lofty levels in 2022?

Perhaps. As one of my InvestorPlace colleagues recently pointed out, Deutsche Bank analyst Edison Yu says NIO stock is at a “great entry point setting up for a pivotal 2022.”

Yu went on to say:

Investor sentiment has been lackluster due to lack of new vehicles and supply chain constraints, and most recently, the heightened US delisting risk. We believe these headwinds can all reverse in the coming 12 months with NIO launching 3 new models over the next 12 months and boosting manufacturing capacity from 120k to 600k.

According to MarketBeat, the consensus price target for NIO stock is $65.90. That is more than double today’s price and near shares’ all-time high of just below $67, which was made in January 2021.

The Bottom Line on NIO Stock

I’ve always been a fan of Nio. I like the subsidies that Beijing gives the company and its BaaS service. And I like that it’s a Chinese EV company, as Chinese consumers are much further along in electric vehicle adoption than their U.S. counterparts.

I’m not expecting a 100% gain in NIO stock this year. But if the EV maker can maintain or improve upon its 2021 growth, then this should be one of the better EV plays in the market.

On the date of publication, Patrick Sanders was long TSLA. He did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders.