Is NIO in Trouble? | NIO's Future | Company Analysis

I’ve had a number of people make comments in my NIO vs Tesla video that have a lot of negativity towards NIO. In this video, I give an update on NIO and give my take on NIO’s future prospects.
I want to preface this by saying that you should do your own financial diligence when investing and that this is my opinion and should not be taken as financial advice.
On November 13, Andrew Left of Citron Research came out with a report that NIO is overvalued and it set a price target of $25 which is 48% below the previously traded price of $48.
Mr. Left’s main point of contention for NIO was that Tesla will cut the price of the Model Y to US equivalent $41,000 and make life difficult for NIO’s bestselling model ES6 and the newly released EC6.
Does he have a point? Sure but I think he’s missing the big picture.
I’ve already covered the ES6 in another video, so if you would like a detailed comparison between the ES6 and the Model Y, please click on the link on the top of the screen.
Tesla has the Model Y listed on the Chinese Tesla website for US equivalent $74,000 for the base long range model. Tesla made approximately $3000 per vehicle last quarter. How in the world would they be able to cut the price of the Model Y by 55% or $33,000?
The NIO ES6 SUV starts at $54,000. There’s also a $4000 subsidy for EVs that have a swappable battery. It seems that Chinese consumers are rather fond of NIO as it had sold over 5000 EVs in October or over 100% sales growth versus the same month in 2019. NIO sold 2695 ES6s, 1477 ES8s and 883 EC6s in October.
I think that you need to look at the big picture when it comes to NIO. What I am trying to say is that the EV market in China has plenty of room for more than Tesla. NIO has 4% marketshare of the EV market in China. Tesla has about 10% marketshare. It’s like saying just because there is Mercedes, you can’t have BMW.
Sales of battery electric vehicles in China are up 137% in October to 121,000 units. That’s still only 4.7% of the 2.57 million vehicles that were sold in China. As you all know, most countries including China are trying to replace gasoline vehicles with cleaner energy vehicles and battery electric vehicles are going to take the vast majority of the 2.5 million vehicles sales in the coming years. That’s without NIO going international.
Plus NIO has already executed on over a million battery swaps for customers. Apparently, battery swap is an important selling point for NIO versus the competition. Many Chinese live in cities and apartment buildings that do not have access to easy access to chargers.
Maybe it’s silly to say that NIO is the Tesla of China as there is only one Tesla but being a real EV company with real vehicles and real sales is impressive for a six year old company.
I also like the CEO Li Bin’s vision of the company. It’s setting itself apart from the competition with superior customer service. NIO Houses which allow NIO owners to drop off their kids and go shopping or hold social gatherings have helped increase brand loyalty.
To go further into how serious NIO is about customer service, if you get into an accident, NIO customer service representative will arrive at the accident and handle all the police reporting for you so that you can get back to work.
NIO owners can also have NIO come to your location and charge your vehicle so that you don’t have to go to a charging station and wait. NIO only charges the owner for the price of electricity for this convenience.
Do these extras seem like something a shortsighted company trying to make a quick profits? I don’t think so. It’s a well planned and long term outlook company looking to build a loyal customer base and increase desirability. It’s no wonder that NIO has the highest owner’s satisfaction of any car brand in China.
Customer satisfaction will erode if the quality of the vehicles are not up to the customer’s expectations. Mr. Li Bin made a shrewd move by hiring Shen Feng. Shen Feng has been involved in creating a manufacturing process that is state of the art.
NIO has built a Debug system that allows customers to send feedback and they send 100-200 suggestions per day. NIO is able to respond within 12 hours to the customers. NIO’s average time to resolve quality problems is 45 days versus traditional automakers which takes 90 days. NIO is able to introduce new features and improvements quicker than other companies.
This isn’t just NIO talking a big game and not executing. According to JD Power, in 2019’s China New Energy Vehicle Experience Study, NIO was ranked number one in quality from two to six months of ownership. NIO followed that up with another #1 ranking amongst all battery electric vehicle brands again in 2020. The NIO ES6 was also singled out as the highest in initial quality in the midsize battery EV segment.
#nio

[@carsavvy4764]

Too bad we don't get to try out NIO except for people in China. China's investments in EV technology is paying off. Hopefully we'll get to see NIO in the US in the future.

[@ARCTCFOXMAN]

In China Nio buyers get government grant even on the more expensive models if they have swappable batteries. The only manufacturer to benefit. Park a new 6 next to a Model Y and they look like two different classes, the ES 6 being bigger and more luxurious. The thermo controlled battery management technology is superior too. In fact the vehicle just seems better and a salesman comparing the use of mild steel in the Tesla to the carbon fibre in the Nio makes the Nio an easy sale. Battery swap will give Nio owners great options to upgrade on a small lease increase, the swap being done in the time it takes to sign the paperwork. They have already got Solid State 620 km range batteries announced for next year. Way ahead of Tesla, Ford, GM etc.

[@kingdavig]

Short answer.. no it's not.

[@carsavvy4764]

It helps to have the backing of the Chinese government.