NIO And XPeng Up For Sale?

[@wheelsboychat]

Looks like VW has now taken a 5% stake in XPeng, and they plan to cooperate on two Volkswagen-badged midsize EVs in 2026. www.scmp.com/business/china-business/article/3229066/xpeng-gets-volkswagens-us700-million-investment-jointly-develop-evs-worlds-largest-vehicle-market

[@NomadWalker-io3ne]

if Nio can get to 25,000 monthly deliveries which is still possible then they can break even while continuing to do R&D

[@Drgnrt]

Do I understand correctly that this video has been uploaded with a 1 month delay?

[@TAD-9]

This show is such a hidden gem! Keep up the great work guys.

[@MoneyMagnet119]

I find it fascinating to hear the hypothesis that Nio and Xpeng might undergo a merger with other Chinese companies or different electric vehicle firms. The basis of this hypothesis is that both companies are facing losses in their R&D and experiencing stagnation in revenue, leaving them with no choice but to be acquired by a third party. However, while I cannot speak for Xpeng, I believe the situation is different for Nio. The reason being, Nio's ES6 and ET5 Touring sales are expected to gain momentum. The sales of the ES6 are projected to pick up significantly in July, and the ET5 Touring is set to be unveiled by the end of August. Additionally, Nio's updated second-generation vehicles, the EC6 and ES8, are expected to be delivered around September, with a strong conviction that the shipment volume will reach at least 20,000 units or more. The lower sales performance until May 2023 can be attributed to the transition from the first generation to the second generation, temporary market effects such as Tesla's price reductions, and interest rate hikes. In response, Nio implemented several policies to revitalize its market presence. One notable policy is the monetization of free battery replacements. Instead of limiting the free battery replacements to six times per month, Nio has decided to charge customers for battery replacements. This change will help reduce the burden of constructing and operating battery swap stations, leading to a decrease in costs associated with these services. The lower profit margin for Nio, compared to other competitors, comes from the cost of establishing and operating battery swap stations. However, with the monetization, there will no longer be a need to allocate substantial funds towards these operations, resulting in increased profitability. Moreover, the ES6 has been a flagship model for Nio, accounting for over 40% of total vehicle sales until the first-generation model was discontinued. Additionally, the ET5 Touring is expected to play a pivotal role in overall vehicle sales, addressing the shortcomings of the ET5 model. Furthermore, Nio has received support from the Abu Dhabi government, becoming the third-largest shareholder following Tencent and Baillie Gifford. This support not only eases Nio's entry into the Middle Eastern market but also has the potential to lead to increased sales. Furthermore, Nio's sales performance in Europe gains further support from the notable increase in sales in Germany since June. Although the sales figures alone may seem small, when considering the number of vehicles leased through BAAS (Battery as a Service) collectively, it becomes a significant figure. This observation is based on the fact that over 90% of Europeans prefer subscribing to vehicles with battery installations rather than purchasing, as reported in an article. In contrast, the current ratio in China is approximately 6:4. However, it was an intriguing video that provided ample insights, but the current situation suggests a different trajectory for Nio compared to the hypothesis mentioned.

[@NomadWalker-io3ne]

ET5 Touring deliveries have already started I believe, the only model left to unveil is the new EC6.

[@MoneyMagnet119]

@@NomadWalker-io3ne The ET5 Touring vehicles being delivered by NIO were pre-produced, and customers who chose customized options may experience a delivery time of approximately 3-4 weeks. As a result, all customers who purchased any configuration other than the basic model can expect to start receiving their vehicles from June 15, 2023 onwards. This extended lead time is due to the personalized nature of the orders, ensuring that each vehicle is tailored to the customer's specifications. Furthermore, a similar situation occurred with the ES6 model, which also began its deliveries on May 24th. Despite the earlier start of deliveries, the shipment volume was lower than expected. This can be attributed to the same reason - the ES6, like the ET5 Touring, offers various customization options, leading to longer processing times for individualized orders. Nevertheless, NIO is committed to delivering high-quality, personalized vehicles to meet the unique preferences and requirements of each customer.

[@NomadWalker-io3ne]

@@MoneyMagnet119 So not end of August as you wrote. People are already getting deliveries of custom ET5 Tourings. I have no idea where you are getting end of August from... And definitely not the "unveiling". It's already being delivered. The last one to be unveiled is the EC6 as I have stated.

[@etbadaboum]

Financial situation at NIO is quite terrible even with projected excellent sales, and they even do it with contract manufacturing... Also '90% of Europeans prefer subscribing to vehicles with battery installations rather than purchasing' that'd be true if NIO covers Europe with battery swapping stations and before that they could go bankrupt several times considering the size of the total investment.

[@MoneyMagnet119]

@@etbadaboum Thank you for sharing your thoughts. It's clear that NIO has been facing financial challenges, especially prior to monetizing battery swapping on June 15, 2023. Despite this, they have actively pursued partnerships and constructed around 1,500 battery swapping stations, with plans to build 2,300 more within the year. The decision to transition from offering six free battery swaps per month to charging for them is expected to generate significant revenue for the company. Additionally, NIO has strengthened its revenue streams by introducing the NOP+ subscription service, similar to Tesla's FSD, for $52 per month. This diversification aims to generate income beyond vehicle sales. The estimated daily average of 50,000 vehicles using battery swapping stations, coupled with the monthly subscription fee for battery upgrades, points towards potentially substantial earnings. Considering NIO has sold approximately 350,000 vehicles thus far, about 1/7 of the total sales result in daily battery swaps. This analysis illustrates how the company can secure a steady stream of income to further accelerate the construction of battery swapping stations. Regarding JAC's contract manufacturing, it's true that establishing a new factory and production entail significant costs and time. To offset any potential operating losses, NIO has chosen the path of outsourcing production to JAC and generating revenue through sales while elevating the brand image. This approach has allowed them to build the second factory, as they haven't yet accumulated enough capital to independently establish a factory of such scale. Yur insights shed light on the shifts in NIO's revenue strategies and their efforts to overcome financial challenges. It appears that they are taking calculated steps to secure a stable income source and expand their infrastructure despite the hurdles they face.

[@dennista42069]

I cannot imagine that William Li would sell NIO! There is so much still in planning like subbrands or stuff like the NIOPhone. NIO has Battery Swap as a differentiator. As for financials, NIO still has 5.5$ billion and recently got 700$ million via an investment. Li said that he is confident that margins will recover to the end of the year. Recent registrations of NIO models have gone up quite a bit, now that they have all their models out. If NIO can get back to levels of 2020 where they had a net margin of -5.6% that would be pretty nice.

[@etbadaboum]

Being cash flow positive should be a better objective than shipping NIOphone (sigh)...

[@dennista42069]

@@etbadaboum From an investor perspective yes. The best is to work on both fronts. It is important for a quite young company to spend into R&D. NIO has big plans and therefore they are ready to sacrifice the immediate profitability. Investors who wonder about it have'nt quite done their due dilligence, because it is quite obvious NIO isn't only going to stick with EV's.

[@etbadaboum]

@@dennista42069 I'd prefer as an investor (I'm not) for NIO to invest in its own manufacturing capability because, though I don't know the nature of their contract with JAC, it makes more sense to gain profitability on car with advanced manufacturing technology, the ultimate differentiator between very competitive car companies.

[@etbadaboum]

Love the show, these kind of discussions are rare to find actually! Please do more!

[@DDGGVVMM]

Definitely not Nio, especially with how much cash they have in hand plus the recent investment from the Abu Dhabi fund.

[@jlaurice4698]

Great videos! i been binge watching your content all day, you guys will surely get lots of subs soon!

[@rededwards3479]

Excellent video....Would have been icing on the cake if you had a NIO and XPENG in the background...model NIO Ep9 on the table...hmmm..you guys are on a tight budget. ...lol.. Well done!

[@wheelsboychat]

I think we’d have to cut a hole in the wall of our office to pull that off, which seems cost prohibitive haha

[@rededwards3479]

@@wheelsboychat Hahaha...I hear ya. Hey can you explain NIO insurance. Does NIO own the insurance company and therefore all monthly insurance fees go to NIO. Or is the insurance company owned by an outside entity and NIO just REFERS car owners to this entity.

[@meetsamuelbelay9363]

What in the Hell! This guys nailed it! Do you guys have a Time Machine

[@ssjj005]

I don't know about XPEV, but for sure they don't know what they talking about NIO. They didn't even mention NT 2.0 retooling. Look at the BS for NIO, they have enough money until they become profitable.

[@etbadaboum]

They won't become profitable if they start launching two new entire brands and a stupid phone

[@jackcomer3334]

Agreed

[@jackcomer3334]

@@etbadaboumcap

[@Luke-PlanesTrainsDogsnCars]

Another thing about NEVS that people don't know about is that it is SVEN spelt backwards Ethan.

[@NomadWalker-io3ne]

i can't see nio selling themselves to a foreign entity, to another chinese company maybe but not a foreign entity

[@etbadaboum]

That'd also mean the said entity will say good bye to Chinese market for the bought brand

[@avriljil]

Why you didn't mention French auto makers, Renault, Peugeot or Citroën

[@etbadaboum]

Absolute no chance IMO, the moment a foreign entity buys a Chinese car maker, it can say good bye Chinese market for this brand. Also little chance that CCP allows such companies to be bought.

[@etbadaboum]

@@calving2903 Stellantis, FCA before, isn't wholly US-owned anymore

[@WilliDurpel]

Hi I like your channel very much. Could you maybe make a video about why you think German electric cars are selling so badly in China and how BYD manages such rapid growth with stable economic data? At the moment there is hardly any car manufacturer that is even making a profit with cheaper electric cars, especially in the Chinese market at the moment.

[@wheelsboychat]

Thank you for the support! That would be an interesting topic we will put it on the list!

[@etbadaboum]

@@wheelsboychat Love this channel too! Please do more of them. I love learning about China's car market.

[@etbadaboum]

If there's a buy, considering their financial situations, it'd be at a low price. Especially from another Chinese company since the market is completely saturated and everyone is thinking of overproduction capacities (thanks government for car subsidies just announced though!). If it's a foreign company they can say good by to the Chinese market since 95% of EVs sold in China in 2022 were Chinese (including 15% for Tesla) so there's obviously nationalism going on here. No easy solution: China's car companies are about to land after years of flying high with no sight of the ground. This is a very though industry in a very tough market. I'd love though more insights into the politics of China's car market and main industry.

[@jackcomer3334]

I agree with what your saying but you are comparing non-luxury to luxury vehicles sales are going to be lower, then if you look at the status of Nio there delivery’s and sales are very very low in the first 2 quarters of the year for some odd reason you guys need to check the status

[@ozer1923]

NIO stock up to 500 $ future

[@simsond605]

Nio to the moon

[@rbt3088]

X peng, Alibaba staying behind this factory!

[@theolich4384]

Quality discussion. The G6 seems to be on the right track but like Mark said, the next car being a MPV signals that the questionable product planning that has been plaguing Xpeng for so long is still there. Even within the realm of Chinese NEV MPVs they’re already late in the game! How are they gonna have a competitive edge against the Denza D9 that is showered in BYD fairy dust and flying off the shelf like no other, or the mighty beasts from Li and Zeekr? As for NIO, I believe they still have cards unplayed. The recent price drop is encouraging but they really should, and could do more. Shave that one motor and those Orin-X off and make that damn sub-¥300k car. Forget about the “prestige” and ALPS (a terrible idea IMO) when your very survival is hanging by the thread. They do have substantial government backing and I suspect middle eastern investment like the recent one will go on pouring in to keep like NIO going. More promising than um, Lucid, are they not?

[@wheelsboychat]

Agreed on all points! Add the NIO phone debacle to their list of bad ideas. I truly cannot fathom how they think that will add enough value to their cars to increase sales and justify the massive development costs. I also can’t see that working anywhere outside of China. What European is going to buy an expensive EV from an unproven brand (in their eyes), and then buy a specialized phone to go with it?

[@Jajalaatmaar]

I ordered an Xpeng G9 here in the Netherlands. It beats am Audi Q8 E-tron and it's 30% cheaper. Also cheaper than BMW IX and Mercedes EQE SUV. Kinda seems like a no brainer here if you're shopping in this segment. The G6 also seems strong. Coming in spring next year, I heard.

[@etbadaboum]

@@Jajalaatmaar Are you confident in reliability and service cost?

[@etbadaboum]

Lucid car is fantastic (I'm not a shareholder) and the tech is great, Aston Martin just bought it for its EVs.

[@theolich4384]

​@@etbadaboum Not doubt they are. But they've been having trouble scaling up since inception, not unlike Nio (although it's not exactly the same: the problem of Lucid is manufacturing prowess while Nio is struggling to find enough customers), and have been sustained by Middle Eastern investment, which again seems to be the path Nio is taking with the recent injection of Abu Dhabi fund.

[@rededwards3479]

NIO needs to RAFFLE or have a LOTTERY to sell CARS. Buy a NIO drink or COFFEE for $2.50 at a NIO house and automatically get entered into a RAFFLE to win a NIO.. NIO has 120 NIO houses Globally. IF an ET5 cost $50,000 that would mean on average each NIO house would only need to sell 166 NIO coffees or drink to equal $50,000. NIO also sells BEER online....Put a "WON a NIO" under the bottle cap. Imagine the KZbin videos, face book post, local news coverage about the WINNER.

[@rededwards3479]

DO you think a RAFFLE or LOTTERY is a good way to SELL cars. NIO has 120 NIO houses. Lets say every time you buy a $2.75 NIO drink or COFFEE at a NIO house you get entered into a RAFFLE or LOTTERY to win a $50,000 ET5. That means on average each NIO house would only need to sell 151 Drinks per day for a chance to win a ET5. What are your thoughts. Or what if NIO got rid of FREE battery Swap and Charged $25 to swap a BATTERY but you also would get entered into a RAFFLE to win a ET5. What are your thoughts?

[@Jajalaatmaar]

Nobody will read this terrible post because of your terrible capitalization. Go away.

[@stefan2796]

Nio EV's seem to burn very well, they are famous for "spontaneous combustion"...

[@stefan2796]

@@calving2903 More than what? More than Nio?

[@bayleearyn4327]

*PromoSM* 😕

[@Asian_Connection]

I would by Xpeng verse NIO. Xpeng comers with the best autodriving!

[@puhvogelpuh3165]

😂😂😂😂😂

[@渡海-q2w]

Nope unfortunately you are wrong! they won't be for sale ever.

[@wheelsboychat]

You may be right! The whole thing was really just an excuse to discuss how surreal it is to even have people discussing the possibility of a foreign auto company buying a Chinese brand.

[@johnsmith-cw3wo]

@@wheelsboychat IF VW and Mercedes are into buying EV companies, they should buy Lucid Motors. 😎 Foreign auto company buying a Chinese brand (with good tech) will probably be stopped, for ''national security reasons'' - they sure learned fast from America. 🙃😆