Can Nio Stock take advantage of Nikola’s troubles?


[10/1/2020] Can Nikola’s problems benefit Nio Stock

Shares of Chinese premium electric vehicle company Nio have jumped more than 15% in the past two trading days, in part thanks to a positive report from Deutsche Bank, which raised expectations for revenue and profits and expressed optimism about the technology and the company’s brand recognition in China. Apart from that, there could be another factor driving interest in Nio stock.

Electric vehicle inventories have been in high demand this year, but there are few viable ways to play in the space. EV indicator You’re here looks good but is richly valued, its share increasing nearly 5 times since the start of the year with a market cap of around $ 400 billion. On the other hand, electric truck startup Nikola has come under fire for misleading investors about its technology and capabilities and is now the subject of investigations by the US Department of Justice and the SEC. Investors could sit on the sidelines until the company delivers a product. Nio, which is trading at a relatively reasonable revenue of 7.5 times the 2021 consensus, seems like a decent choice for investors who want to gamble in the EV space without overpaying or betting on unproven companies. Nio’s revenue is expected to grow by over 90% in 2020 and around 70% in 2021, according to consensus data.

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[8/26/2020] Nio Stock continues to soar

The share price of Nio (NYSE: NIO), a Chinese premium electric vehicle start-up, continued to climb 19% on Tuesday. The stock has risen about 50% in the last month alone. The recent gains are attributable to several factors. First, UBS analysts revalued the stock, drastically increasing their price target from around $ 1 per share to $ 16. Secondly, the company has also indicated its intention to enter new markets, starting with Europe, from the second half of 2021. Nio has also launched a new ‘battery as a service’ offering, which reduces the initial cost. of a vehicle by selling the EV without a battery and forcing users to pay for the batteries monthly (about $ 140 per month), much like they would for gasoline on an internal combustion engine car. Users can replace depleted batteries with fully charged batteries within minutes, at 143 battery exchange stations in 64 cities across China.

Nio stock has risen more than 4.5 times this year. How does its valuation compare to that of other manufacturers of electric vehicles? Is it overrated? Now, Nio’s $ 21 billion market cap implies that it is trading at around 6 times the 2021 consensus revenue of around $ 3.6 billion. In comparison, You’re here is valued at $ 375 billion, roughly 7 times the 2021 consensus revenue of around $ 41 billion, while Nikola, an electric truck startup, is valued at $ 15 billion despite the fact that it has not yet started commercial production. In view of the relative valuation, Nio seems well valued given its stronger short-term growth outlook.

Is Nio stock a better investment than Witness EV Tesla? Learn more in our dashboard analysis How does Nio compare to Tesla?

[7/27/2020] Some recent updates on Nio Stock

Chinese premium electric vehicle start-up Nio saw its shares increase by around 50% in July, thanks to strong second-quarter delivery figures and a general increase in demand for shares of vehicle companies electric. Below we take a look at some of the recent developments for NIO.

In early July, NIO released its second quarter delivery report, indicating that it delivered 10,331 vehicles, marking an increase of 191% year-on-year and around 169% sequentially. The company has benefited from pent-up demand after lockdowns linked to Covid-19, and its total deliveries for the first half of the year now stand at 14,169 cars.

Last week, the company provided more details on its EC6 crossover SUV, noting that it would be priced at 368,000 RMB (around $ 53,000) before subsidies. The vehicle, which is a coupe-style version of the ES6 mid-size SUV, will begin deliveries in September. However, it will be interesting to see how that plays out when Tesla launches the Model Y compact SUV in China in early 2021. While the price of the China-made Model Y is not yet known, we believe it is likely that ‘it is lower than that of the EC6. . For example, the Model 3 sedan sells for around $ 41,000 before subsidies in China and the Model Y in the United States costs about $ 4,000 more than the Model 3, indicating that a price below $ 50,000 for the basic model is quite likely.

Nio also secured lines of credit from six Chinese banks totaling 10.4 billion RMB (about $ 1.5 billion) this month. This is a very positive development for the company, given that it started 2020 with a precariously low cash flow situation. Since then, the company has raised more than $ 1 billion from Chinese government agencies while benefiting from a capital injection from early investors Tencent Holdings. With the new lines of credit, the company should have sufficient liquidity to execute its plans and launch new models.

Is Nio stock a better investment than Witness EV Tesla? Learn more in our dashboard analysis How does Nio compare to Tesla?

[6/23/2020] A look at Nios’ business model and how he makes money

Nio, a Chinese automaker that designs and manufactures premium electric vehicles, has seen its inventory nearly double since the start of the year. Nio’s revenue grew from around $ 720 million in 2018 to around $ 1.12 billion in 2019, as its vehicle deliveries grew from around 11,300 units to around 20,600 units. Sales are expected to increase by 65%, driven by strong sales of the company’s ES6 5-seater electric SUV and the launch of the smaller EC6 SUV, with deliveries expected to begin later this year. In our interactive dashboard Nio’s income: how does Nio make money? we discuss Nio’s business model, followed by sections that examine past performance and expectations for 2020 and 2021 for the company’s revenue drivers, and competitive comparisons with Tesla. The key elements of this analysis are discussed below.

Nio reported total revenue of around $ 1.12 billion for full year 2019. This includes 2 operating segments:

  • Automotive: $ 1.06 billion in 2019 (94% of total revenue). Sells the company’s electric vehicles, which currently include the Nio ES 8, which is a premium SUV available in six or seven seater configurations, and Nio ES 6, a five seater SUV.
  • Other: $ 66 million in 2019 (6% of total income). This segment includes revenues from the Company’s service packages for its electric vehicles and energy solutions that include battery charging and swapping.

Nio’s automotive segment

  • Automotive segment sales grew 50% from $ 706 million in 2018, when the company launched its vehicles, to $ 1.06 billion in 2019.
  • This is mainly due to higher shipments, which fell from 11.3,000 in 2018 to around 20.6,000 in 2019. However, the average price fell from $ 62,000 to around $ 52,000, due to a higher mix of ES6 SUVs, which have a lower price. point compared to the flagship SUV ES8.
  • We expect revenue to reach $ 1.78 billion in 2020, as shipments increase by more than 70% to 35,000 units, due to increased adoption of ES6 and the launch of the ‘More compact EC6, with revenue increasing further to $ 2.75 billion in 2021.
  • The Chinese auto market has recovered well after Covid-19-related disruptions earlier this year, and Nio said it had a record monthly delivery of 3,436 vehicles in May 2020.
  • Additional details on how The main drivers of Nio’s automotive revenue have changed over the years and are expected to change in the future. are available in our interactive dashboard.

The other segment of Nio

  • Other sales have grown from $ 14.4 million in 2018 to $ 66 million in 2019 and we expect the metric to grow to $ 105 million in 2020 and $ 152 million in 2021, thanks to a larger base of vehicles on the road, which should stimulate demand for service packages. and energy sales.

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