To The Moon

$NIO Inc.(NIO)$ is scheduled to report its quarterly earnings for the period ending 30 September 2024 on 20 November 2024 before market open.

NIO is expected to show a rise in quarterly revenue with a 0.7% increase in revenue to CNY 19.193 billion from CNY19.07 billion a year ago,

This is within the guidance given on 05 September 2024, for the period ended September 30, which was for revenue between CNY 19.11 billion and CNY 19.67 billion.

Its gross margin was 9.7 percent in the second quarter, the highest since the third quarter of 2022. The figure was 1.0 percent in the second quarter of 2023 and 4.9 percent in the first quarter of 2024.

Vehicle margin was 12.2 percent in the second quarter, compared to 6.2 percent in the second quarter of 2023 and 9.2 percent in the first quarter of 2024.

Earnings per share estimate to come in at a loss of 25 cents or CNY 2.16 per share.

NIO Third Quarter Deliveries Numbers Encouraging

NIO delivered a record 61,855 vehicles in the third quarter, which is within the guidance range of 61,000 to 63,000 vehicles.

Deliveries for the quarter were up 11.59 percent year-on-year and up 7.81 percent from the second quarter.

So we could be expecting revenue to be higher with the estimated 0.7% increase.

Sequential Growth In Gross Margin To Continue In Guidance

Nio previously guided for further sequential growth in automotive gross margin in the second half of 2024. In particular, it guided for the Nio main brand's vehicle margin to reach 15 percent in the fourth quarter of 2024, Wang's team noted.

The company's management attributed the expected margin expansion to economies of scale from increased volumes, lower supply chain costs, and improved product mix, according to Deutsche Bank.

Nio noted that Onvo L60's gross margins are likely to remain in the single digits in 2024.

Over the long term, the company's management is targeting monthly sales of 30,000 to 40,000 units under the Nio brand, with a vehicle margin of 25 percent.

Monthly sales of the Onvo brand would be higher than those of the Nio brand, with a long-term vehicle margin target of 15 percent.

If NIO can continued this growth, we could see NIO stock price trying to go near its IPO price.

NIO International Strategy To Include Hybrid EV Model To Avoid Steep Tariffs In EU

Speculation on Nio’s international strategy continues. On 4 November 2024, Reuters reported that the Chinese pure electric vehicle (EV) brand will be adding a plug-in hybrid EV model (PHEV) to its product range for the first time.

This model, the reporting claims, will not be made available in Nio’s domestic market of China, but instead targeted towards overseas consumers in Europe, the Middle East, Latin America, and Africa. The rumoured hybrid will be part of Nio’s Firefly sub-brand. Production is slated to begin in 2026, with deliveries following in 2027. 

Nio began deliveries of the new ES8 (known locally as the EL8) in Europe, after launching the electric SUV there three months ago. As of today, Nio has 56 battery swap stations in Europe, including 19 in Norway, 18 in Germany and 10 in the Netherlands.

Although the company maintains it is pursuing a pure electric strategy, a hybrid would allow it to avoid steep tariffs in the EU. This hybrid strategy would help in NIO’s long term plan to grow in the Europe, and this should also take off in other regions.

NIO Inc (NIO) Year-To-Date Returns

 NIO investors have suffered more than 45% decline on its stock price, as it is currently trading way below its IPO price.

So NIO’s growth strategy would be important on how to navigate the EV space as we are seeing more and more companies affected with tariffs, and not forgetting the tariffs that would be coming from US new Trump administration.

NIO strategy to move hybrid to overcome tariffs in Europe might be a good plan to grow its international market.

Technical Analysis - MACD and Multi-timeframe (MTF)

NIO have been trading way below short-term and long-term MA, and this does not give much confident to investors. If we looked at how the earnings on 05 September played out, NIO was also below both the short-term and long-term MA.

But we are seeing buying interest compared to how investors are behaving one day before NIO third quarter earnings release, we need to see if buying demand could come back today (19 Nov).

If that happen, we might see a reversal on the MACD, and if it can form a bullish MACD crossover, we should be looking for some upside, but do take note that MTF does not give a good signal, a weak downward trend is expected.

When MTF give a downward trend, the stock might not have the strength to make a strong reversal,but I would continue to monitor this stock on the price action.

Summary

NIO stock price performance have been quite disappointing since its IPO, there have been quite a few plan to boost its growth, but I think NIO latest strategy to go hybrid for the EU might be something they could turn things around.

But what is important is how NIO is going to navigate the competitive space in China and US, but I do see that NIO could make some significant move on its stock price.

I will be monitoring the price action to catch an entry for NIO if the price and technicals give me a clear signal.

Appreciate if you could share your thoughts in the comment section whether you think NIO would be able to sustain its sequential growth with its latest EV strategy to go hybrid.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.