Nio plans to start delivering the ET7 electric sedan in 2022.
Evelyn Cheng | CNBC
Nio’s sophisticated and powerful electric vehicles have attracted the attention of investors and rival automakers around the world, but have overcome the supply chain turmoil that has hit Chinese companies’ ambitious sales growth plans. It is not always possible. ..
Wall Street analysts on Thursday said Nio’s senior management on these supply chain issues and how recent sharp price increases affecting key products such as nickel will occur in the coming months. You may ask some difficult questions to your job. The car maker reports fourth-quarter earnings after the US market closes. The revenue webcast will begin at 9 pm EST.
Formerly one of Memestock’s high flyers, Nio’s American Depositary Receipts have been in a difficult situation over the past few months as relations between the United States and China have cooled.
Nio’s revenue report itself shouldn’t be too surprising. The company delivered just over 25,000 vehicles this quarter, approaching the guidance range limit (23,500-25,500). Investors will listen to the latest information on Nio’s efforts to expand its dealer network in China and launch sales in several new European markets.
They are also looking for details on Nio’s plans to expand the network of battery replacement stations, the backbone of the company’s innovative sales model. Buyers can choose to purchase Nio at a significant discounted price without a battery pack if they subscribe to the battery replacement service.
Nio isn’t widely covered by U.S. banks, but four Wall Street analysts who responded to Refinitiv’s survey expect Nio to lose RMB 2.97 ($ 0.47) per share on average. doing. Eight analysts said Nio expects to report an average revenue of 8.682 billion yuan ($ 1.36 billion).
Supply chain and outlook
These analysts may ask a few questions about costs and margins for the fourth quarter, but the real story is probably in the company’s guidance this quarter and for the full year.
Like many other automakers, Nio was forced to cut production in 2021 due to supply chain disruptions, including a global shortage of semiconductor chip types used in automobiles. In recent months, Nio has been able to avoid these supply chain issues and maintain a monthly production rate of 10,000 to 11,000 vehicles. (February deliveries fell below that level to just 6,131 due to factory downtime before and after the Chinese New Year celebration.)
Deutsche Bank analyst Edison Yu is closely watching Nio and its major domestic competitors. In a note on March 20, he dispelled supply chain concerns and said the company expects production to increase significantly in the coming months.
“We [manufacturing] The occupancy rate will increase to 15,000-20,000 per month by June. ” He then believes that the new plant, which is expected to go live in the fall, will help increase the company’s production to 30,000 per person. The moon by sometime in the first half of 2023.
Assuming it works that way, its sales growth will be boosted by three new models, two sedans and SUVs that Nio expects to launch in 2022. Production of a high-tech-packed model called the ET7, the larger of the two sedans, began Thursday morning, Nio said in a WeChat post.
Yu believes rising raw material costs will put pressure on Nio’s margins at least in the coming months, but the company will address this by using low-cost lithium iron phosphate (LFP) batteries as standard. He states that he has a plan. Range model.
Yu is bullish on Nio and maintains a buy valuation and a $ 50 price target.
Morgan Stanley analyst Tim Xiao is also bullish on Nio, but lowered his bank’s price target from $ 66 to $ 34 on Tuesday’s note. This reflects a recent slide in stocks. Xiao wrote that “increasing macro headwinds and serious supply challenges” would be difficult for Nio in the short term, but its “excellent liquidity and revenue visibility” is the economy. I feel that I am in a good position to survive the recession.