NIO - Buy Now, Wait or Sell? Read & decide.
The last time I covered $NIO Inc.(NIO)$ it was just after its June & Q2 2023 delivery data was out.
In full cycle, here I am again - looking at the latest data released and sharing my insight into this Chinese premium EV maker.
Very quickly:
In September 2023, it delivered 15,641 EVs. This is an increase of +43.8% YoY.
Compared to its August 2023 delivery (19,329 EVs), it is down -19.08%.
Compared to its July 2023 delivery (20, 462 EVs), its is down -23.56%.
There is “nothing” to celebrate — strictly speaking. RIght?
Casting the month-to-month comparison aside, if we look at NIO’s quarterly delivery from 2019 until present, it has been on an upward trend, apart from the dip in Q1 2020 (onset of covid towards March 2020).
Will NIO be able to replicate the 2022 - Q3 and Q4 “spikes” in 2023’s 4th quarter?
This is the important question NIO needs to address now (see below).
Above is a simple Excel file that I have created, tracking NIO’s weekly EVs delivery (data) before data was unavailable.
To date, NIO has delivered 110,911 EVs.
To match 2022 total delivery (122,486 EVs), NIO has 11,575 EVs (or 9.45%) to deliver in the remaining 3 months.
To match its revised 250,000 EVs forecast — NIO has 139,089 EVs (or 55.64%) to deliver in the remaining 3 months.
This works out to be a [a] monthly delivery of 46,363 EVs or a [b] weekly delivery of 8,552 EVs.
To date, it remains a mystery why Nio’s CFO decided to announce a revision to its 2023 output to the tune of 250,000 EVs (see below), that is > 100% increase of its 2022 delivery.
What was he thinking?
The wolves of Wall Street will have a field day, when NIO is unable to meet its targets by end 2023.
Looking at my Excel tabulation, the probability of NIO hitting its revised target is slim.
Hopefully the “redemptive reward” is NIO will close off 2023 with a total delivery that is close to the 250,000 EVs forecast.
It is still an “achievement” of sort to me, because overall output would have been easily 50% over and above its 2022 total delivery.
My parting concern (about NIO) remains its burn rate; much much faster than the rate which they earn their keeps.
With an ultra slim margin from its EV sales due to NIO cutting its price to stay competitive, they will need the volume to “cushion” the discount.
The act of raising US$1 Billion in convertible bond so that NIO could continue to “burn” money like there is no tomorrow is plain irresponsible to me.
If NIO is incapable of earning its keeps, it should instead learn to rein in its expenditure.
If it is R&D about [a] NIO’s EV, [b] its next generation of solid-state battery, [c] improvement on its manufacturing plants / processes, they are “relevant investment” to help build better (and even cheaper) EVs, at a faster pace.
Selling a “dedicated” mobile phone just to control the EV is an egotistical move by NIO’s management.
This is especially true when NIO is not even profitable.
What is “wrong” with launching a NIO mobile apps (for now, instead of a mobile phone) — to get customers attached to it, before taking a chance to create NIO mobile phone subsequently when the company earns enough money?
That’s not all, NIO will push out a new mobile phone yearly. This is insane. What if the take up rate is poor, still continue to pour money down the drain, just to keep the mobile phone business going? Another misstep in my book.
Summary of the 3 Chinese EV Makers
Looking the 3 Chinese EV makers ($XPeng Inc.(XPEV)$ , $Li Auto(LI)$ and NIO) Q3 2023 delivery.
No question who the runaway leader is. FYI, Li Auto is also profitable.
As for the 2nd position and be profitable, it is still up in the air.
In case you are interested, my other “PICK” posts. Enjoy:
Xpev, Nio, Chpt - Top 3 EVs must buy in Q4 2023. Click here! to read & “like” ok. Tks.
Cathie Wood ETF ARKK out of top 15. Sell? Read & decide. Click here! to read & “Like”. Tks.
US Mkt ends Sep '23 on low. NIO, buy the rumours? Click here!. to read.
Do you think NIO will be able to meet its revised delivery of 250,000 EVs?
Do you think NIO or XPeng will be #2 after Li Auto?
Please give a “LIKe”, “Share” and “Re-post” ok. Thanks. Rating is very important (to me).
Do consider “Follow me” and get firsthand read of my daily new post/s ok. Thanks.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Hedge fund activity increased by 3.1 million shares in the last quarter. TipRanks has NIO as a moderate buy with 6 of the 10 analyst recommendation NIO as a buy. (4) of the 10 analyst recommend NIO as a hold and no analyst recommend to sell NIO. If NIO’s earning report is positive I estimate we will see $5 to $8 a share gains for this quarter.
Actually, NIO will be between $16 to $20 within the next 12 months. That’s a 100% gain to todays selling price.
NIO has integrated all aspects of an ecosystem, however the garden variety investors are interested in being no different than the traditional Evs.
OMG, chine EV's all dropping fast 😭.
Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!
Great information
$NIO