Despite Earning, Nio Still Has A Bright Future

Six month ago, I talked about Tesla’s nemesis, Nio,

Move Over Tesla, Here Come Nio

The newest competition is Nio. Nio manufactures and markets electric vehicles. Nio already has a vehicle in production and they have delivered over 1,000 units under EP9, EVE, and ES8 brand names.

Nio was founded in 2014 and is headquartered in Shanghai, China and already has financial backing from Baidu and Tencent. This past week, Nio had an initial public offering on the New York stock exchange. They plan to use the money to ramp up production of their current ES8 and launch new vehicles in China first and then globally.

This past week, Nio announced 4Q earnings this past week.  Nio reported net revenue of 3.44 billion Chinese yuan, compared to revenue of 1.47 million yuan in the third quarter.  Nio also, delivered 7,980 cars in the fourth quarter, much higher than its delivery guidance of 6,700–7,000 units.

The company expects to deliver between only 3,500–3,800 car units in the first quarter of 2019.  CFO Louis T. Hsieh said that the company’s deliveries would likely be weak, at least through the first half of the year, due to uncertainty around China’s economy and the status of a government subsidy for buyers of electric vehicles. As a result, they have delayed their plans 2-3 years to build their own factory.

On the news the stock price dropped.

I personally believe Nio still has a bright future.  China accounted for about 30% of all the electric cars sold in the world. Chinese bought close to 1 miilion electric cars in 2018. Yet, electric vehicles account for just 3% of sales. Thus, the chart suggests

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.