To The Moon

$NIO Inc.(NIO)$ $NIO-SW(09866)$ just released its September delivery data, and with ONVO deliveries steadily growing, it almost broke its June delivery record. L60’s current sales/delivery trend suggests that NIO could see a boost in Q4 deliveries.

At the end of September, NIO also announced a partnership with new strategic investors. NIO’s risk profile is improving, and despite the recent surge in its stock price, it’s not too late to take a long position.

Expected Delivery Increase

In September, NIO delivered 21,181 electric vehicles, up 35.4% year-on-year. It marked the fifth consecutive month where NIO delivered more than 20,000 cars to customers. For Q3, NIO delivered 61,855 EVs, up 11.6% from the previous year—a record quarterly delivery for the company.

What’s key here is that September’s report broke down the numbers by brand. Out of those 21,181 deliveries, 832 were ONVO cars, which is about 4% of the total. NIO just launched the ONVO brand to compete in the lower-cost segment and take on $Tesla Motors(TSLA)$ .

Assuming NIO can maintain this delivery pace, I expect the company to produce and deliver several thousand ONVO vehicles in October. NIO has forecasted Q3 deliveries between 61,000 and 63,000 units, and with ONVO now on the market, I believe their delivery numbers are set to rise sharply.

If demand for lower-priced EVs stays strong—just like NIO’s delivery data suggests—NIO could exceed even my expectations. The ONVO launch could be the catalyst NIO needs to ramp up revenue growth and catch up with rivals like Li Auto.

Revaluation Potential

I’m still bullish on NIO, and here’s why:

1) NIO’s profit margins are improving, meaning the company is making more money on each car sold. While the company is still posting losses overall, the trend is promising;

2) I think NIO’s stock price is widely undervalued.

3) is the strong momentum in L60 deliveries, which is likely to positively impact Q4 results and NIO’s revenue and operating income.

With strategic equity investments and the start of L60 deliveries, I believe NIO’s strong buy rating makes sense, though the company still needs to fundamentally improve profitability. I see NIO revaluing at 1.5x its forward (FY 2025) earnings multiple, which gives a fair value of $9.90 per share—a potential 41% upside. Long term, I see even more value, assuming this EV maker can prove it can become profitable.

Future Risks

On the risk side, I think NIO’s biggest challenge is that ramping up production of low-cost EVs could hurt its profit margins just as it starts bouncing back. Lower margins would delay NIO’s profitability timeline and could be a drag on its valuation.

NIO’s defining moment has arrived. The company delivered 832 brand-new ONVO L60 SUVs to customers in just three days, hinting at strong future growth, which could significantly impact Q4 deliveries. With September deliveries counted, NIO has delivered over 20,000 vehicles each month for the past five months.

Given the current upward trend, I believe NIO’s Q4 deliveries could hit 78,000 units, which would be over 24% growth from Q3 (midpoint).

NIO also secured strategic equity investors, which is a solid vote of confidence. I believe the company’s risk profile has improved. Historically speaking, NIO’s stock is still cheap and has considerable upside potential for revaluation.