Picture supply: Sam Robson, The Motley Idiot UK
Tesla’s been a really enriching share over the previous 15 years. Since 2010, it’s up about 20,500%, even after accounting for the current 40% drop. For NIO (NYSE: NIO) nonetheless, the inventory market story has been very totally different. It has misplaced over half its worth since itemizing in 2018.
Up to now this yr, NIO inventory’s fallen 14% and now trades for simply $3.75. For context, it reached $61 again within the pandemic tech bubble of 2021, that means the peak-to-trough loss here’s a staggering 93%!
Nonetheless, the Chinese language electrical car (EV) maker remains to be rising its gross sales strongly and plans world growth. So may shopping for the inventory at $3 be like me getting in on a younger Tesla again within the day?
Issues I like
NIO’s bread and butter is making good, premium EVs. Nonetheless, it’s additionally launched two sub-brands: Onvo, which targets the mainstream household market; and Firefly, a high-end model targeted on smaller automobiles. It has massive plans to broaden its manufacturers internationally over the following few years, presumably emulating bigger rival BYD‘s success.
The $7.8bn-capitalised firm has pioneered battery-swapping know-how, permitting prospects to swap out a depleted battery for a brand new one in a couple of minutes. It now has 3,245 swap stations, and administration says this offers it a “aggressive edge” within the battery EV market.
It’s additionally constructed a lot of NIO Homes, that are a mix of showroom and group hub for NIO customers and the broader group. Many have libraries, cafés and convention rooms. I like distinctive firms like this, particularly progressive ones run by founders (NIO’s William Li has been referred to as the ‘Elon Musk of China’).
In 2024, income jumped 18.2% yr on yr to $9bn, with 221,970 automobiles bought (a 38.7% improve). In the meantime, the car margin improved to 12.3% from 9.5% for the earlier yr. And it’s focusing on a doubling of NIO automotive gross sales in 2025.
And what I don’t like
On the opposite aspect of the ledger although, NIO reported a $3bn web loss final yr. That was 8% larger than the yr earlier than, that means the EV maker stays deeply unprofitable.
Furthermore, it’s arduous sufficient establishing one new automotive model, by no means thoughts efficiently advertising and marketing and scaling three of them. Then there are these NIO Homes, its personal smartphone, a life-style model referred to as NIO Life, and extra. My concern is that the agency’s attempting to do far an excessive amount of.
One other massive concern I’ve is BYD’s new ultra-fast charging tech, which it says can ship 250 miles of vary in simply 5 minutes. If that’s the case, that would sooner or later make NIO’s battery-swap stations out of date. This raises doubts in my thoughts concerning the technique of constant to roll out these pricey stations worldwide.
Falling knife
Sadly, I’d say the negatives outweigh the positives right here. Whereas NIO retains discovering methods to boost funds, it additionally continues to incinerate money at an alarming charge. That can’t proceed for too many extra years.
If NIO can swing to a revenue in some unspecified time in the future, the inventory may explode larger. However what stage will or not it’s exploding from by then? $2? $1? It’s anybody’s guess at this level.
The inventory nonetheless appears to be like extra like a falling knife to me than an enormous Tesla-esque winner within the making. I’m not going to purchase.
Picture supply: Sam Robson, The Motley Idiot UK
Tesla’s been a really enriching share over the previous 15 years. Since 2010, it’s up about 20,500%, even after accounting for the current 40% drop. For NIO (NYSE: NIO) nonetheless, the inventory market story has been very totally different. It has misplaced over half its worth since itemizing in 2018.
Up to now this yr, NIO inventory’s fallen 14% and now trades for simply $3.75. For context, it reached $61 again within the pandemic tech bubble of 2021, that means the peak-to-trough loss here’s a staggering 93%!
Nonetheless, the Chinese language electrical car (EV) maker remains to be rising its gross sales strongly and plans world growth. So may shopping for the inventory at $3 be like me getting in on a younger Tesla again within the day?
Issues I like
NIO’s bread and butter is making good, premium EVs. Nonetheless, it’s additionally launched two sub-brands: Onvo, which targets the mainstream household market; and Firefly, a high-end model targeted on smaller automobiles. It has massive plans to broaden its manufacturers internationally over the following few years, presumably emulating bigger rival BYD‘s success.
The $7.8bn-capitalised firm has pioneered battery-swapping know-how, permitting prospects to swap out a depleted battery for a brand new one in a couple of minutes. It now has 3,245 swap stations, and administration says this offers it a “aggressive edge” within the battery EV market.
It’s additionally constructed a lot of NIO Homes, that are a mix of showroom and group hub for NIO customers and the broader group. Many have libraries, cafés and convention rooms. I like distinctive firms like this, particularly progressive ones run by founders (NIO’s William Li has been referred to as the ‘Elon Musk of China’).
In 2024, income jumped 18.2% yr on yr to $9bn, with 221,970 automobiles bought (a 38.7% improve). In the meantime, the car margin improved to 12.3% from 9.5% for the earlier yr. And it’s focusing on a doubling of NIO automotive gross sales in 2025.
And what I don’t like
On the opposite aspect of the ledger although, NIO reported a $3bn web loss final yr. That was 8% larger than the yr earlier than, that means the EV maker stays deeply unprofitable.
Furthermore, it’s arduous sufficient establishing one new automotive model, by no means thoughts efficiently advertising and marketing and scaling three of them. Then there are these NIO Homes, its personal smartphone, a life-style model referred to as NIO Life, and extra. My concern is that the agency’s attempting to do far an excessive amount of.
One other massive concern I’ve is BYD’s new ultra-fast charging tech, which it says can ship 250 miles of vary in simply 5 minutes. If that’s the case, that would sooner or later make NIO’s battery-swap stations out of date. This raises doubts in my thoughts concerning the technique of constant to roll out these pricey stations worldwide.
Falling knife
Sadly, I’d say the negatives outweigh the positives right here. Whereas NIO retains discovering methods to boost funds, it additionally continues to incinerate money at an alarming charge. That can’t proceed for too many extra years.
If NIO can swing to a revenue in some unspecified time in the future, the inventory may explode larger. However what stage will or not it’s exploding from by then? $2? $1? It’s anybody’s guess at this level.
The inventory nonetheless appears to be like extra like a falling knife to me than an enormous Tesla-esque winner within the making. I’m not going to purchase.
