NIO - Playing a Potential Runup to Nio Day

Hello Everyone.

I have been following and investing in NIO for about a year and a half now. It’s no secret that NIO has been underperforming compared to it’s American and Chinese Counterparts in Tesla, Lucid, and XPeng to name a few.

I am anticipating a run-up on NIO’s share price until NIO Day which is scheduled for December 18, 2021 in Suzhou, China at the Suzhou Olympics Sports Centre.

Here are some of the scheduled highlights that are anticipated for NIO Day:

Announcement of New Models

May Unveil 3 new vehicle models -

  • EC - a new luxury multipurpose minivan

  • ES - (ET5) - a 2nd generation sedan to compete with Tesla Model 3, BMW 3 Series I3 models, and the XPeng P5, and Audi models. This will fall in line with Nio’s flagship model - the ET7 which is priced at $69,000 USD. However, the ET5 model is anticipated to be an entry-level model that will be priced b/w 300,000 and 400,000 yuan (46,934 - 62,579 USD).

  • EF9 - possible announcement of a rumored new-model luxury sporrscar. Nio had filed patent for design of the convertible version of it’s EP9 model. It is rumored that the Ef9 may sport ultra-high density solid-state batteries which was announced on Nio Day 2020, compatible with NIO’s battery swap technology.

  • ET7 - this is key, the ET7 is NIO’s flagship luxury sedan model w/ 1000km range. And will be expected to give an update on it’s deliveries schedule

Entry to New Markets

Furthermore, it is anticipated that Nio may announce entry into German Markets, which will begin to ramp up production in 2022.

Previously this past year NIO has built new production facilities in Norway and has ramped production of it’s ES8 model. NIO is also scheduled to get 20 Power Swap Stations done in by Q4 2022. The ET7 model is also scheduled to fill orders in Norway by early 2022. Along with Germany, there may be more news on expansion to Europe.

More Nio Day 2020 Updates

Be prepared for Nio to announce ramping up production of all it’s vehicles in 2022 as well. I anticipate there to be more news about it’s Power Swap Stations and 150 kWh Solid-State Battery.

On NIO day 2020, we saw news of the 50KW/H SOLID STATE BATTERY which
IMPROVES ENERGY DENSITY BY 50%.

360 Wh/kg. ES8 850KM ,
ES6 900KM AND EC6 90KM RANGE. NEW MODEL (SEDAN WILL HAVE 1000KM+ RANGE).
STARTS DELIVERY Q4 NEXT YEAR.

And more importantly updates to the scheduled flagship ET7 deliveries in Q1 2022.

My Positions and anticipation for NIO Day + Long Term Plans

Right now, NIO is trading at $42.04 as of AH 5:00pm on November 23. I expect there to be a run-up to $50 and possibly pass through end of november to December 18th on Nio Day. I expect NIO Day to bring positive sentiment, which historically has boosted the stock price further. I currently have 500 shares(which I don’t plan on selling until nio hits 3-digits) and 2 Nio $50 C Jun 17’ 2022. I also hold a few Jan 19, 2024 calls as well. I have previously just sold my previous calls which I purchased back in September and October for significant profit. I am hoping there is a pullback to below $40 dollars where I will purchase more Jun 17 2022 to be safe. However, if this does not happen then I will probably just buy additional calls leading up to december 18 Nio Day.

I also hold calls on Xpeng and Li Auto, which are 2 other massive EV companies in China. (The CEO’s of NIO, XPeng, and Li Auto) are actually all rivals, and friends who have invested in each other’s EV’s as well. I have noticed that significant price movements in these companies have also driven the each other’s prices up and down as well.

I would sell after Nio Day as I anticipate there will be a massive selloff in the days following NIO Day.

As far as NIO as a company long term, holding long term shares + LEAPS is my plan, I expect NIO to really become prevalent in by 2024 and 2025. I am betting on this company long term and will stick it out. I am confident that the stock will moon when it eventually expands to north american markets + makes a profit, which wont happen in 2021 or 2022. But by 2024 I expect NIO to hit 3 digits. Nio also has significant support from the chinese government, which has injected them with money during the pandemic.

Nio also has price targets significantly higher than it’s current share price.

Edison Yu (Deutsche Bank) - price target increased from $60 → $70.

Nick Lai (JP Morgan) - price target → $70

Bin Wang (Credit Suisse) - price target → $71

Jeff Chung (Citibank) - price target → $87

Ming-Hsun Lee (Bank of America) - price target → 65

Fei Fang (Goldman Sachs) - price target → $56

I also have tremendous confidence in NIO’s CEO, William Bin Li, whom is often considered to be a more-humble Elon-like figure. NIO has also experienced significant pullbacks and drought over the past year. However, this stock just wont go below $30.

This is my first ever DD, so let me know if there’s anything I can improve on in future DD’s. Cheers everyone.

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Entry into the German market might be interesting. I will admit, I do not know much about cars. Does Germany (and the greater EU) seem to like electric vehicles?

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Well in Germany alone, the EV sentiment is huge. There has been billions invested in the YoY growth of EV. As part of Covid Recovery plan, german government approved a 8billion euro stimulus to promote EV deployment and expand EV charging infrastructure. The country has 27k charging stations as of March 2020. Also Germany leads all european countries in annual sales of EV vehicles w/ about 400k vehicles sold in 2020. The only country that has sold more is China.

My concern is not whether the EV sentiment will continually increase overseas. But would companies like NIO fail to challenge it’s rival counterparts. It would be difficult beating rivals such as Tesla globally or Volkswagon in Germany in this case. If I’m an adopter of EV’s in Germany wouldn’t I want to a german brand like Volkswagon to lead EV sales in my country? Same thing with US, we would probably gravitate towards american cars first, just as how China would gravitate towards Chinese EV companies first

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What’s missing from this DD is an analysis of the last Nio Day from January 10, 2021.

There was indeed a runup from $39 25 days before NIO day to $67 the day after. As OP is again predicting this time around, it proceeded to dump the following weeks.

We are currently 25 days from Nio Day Dec 18, 2021.

Remember, history doesn’t repeat, but it does rhyme.

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Have they made any updates about battery swapping?

I remember that NIO became popular (amongst other reasons) as they were proponents of battery swapping as opposed to charging - AKA instead of waiting for your car to charge you put in a new battery at defined stations. This requires its own infastructure, which is a challenge.

NIO is in a long term descending triangle since last NIO day. A runup heading into Nio Day this time around would mean a breakout of this pattern. If you’re watching this and wondering if you should enter. You could wait for it to break out of the triangle first.

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I opened a position for 1/21 37C here on the dump today. Agreed with DD on all the fundamentals for NIO, and the potential run-up leading up to Nio day. There are overall risks with SPY right now and also China FUD, but it looks like there is good long-term support at $35

Definitely quite a bit of China FUD. Wish I had established my position after the dump like you. I picked up some 12/23 $45C last week when it was hovering b/w $40-41 based on DD and anticipation of NIO day. I may average down or more likely seek to roll it out further.
Seeking Alpha put out this article today https://seekingalpha.com/article/4473153-nio-solid-buy-but-us-stock-might-vanish-soon talking about possible delisting, which certainly doesn’t help. And I think they put another negative article about it yesterday or day before.

yeah well this didn’t pan out

It’s definitely gotten beaten down due to delisting FUD and whatnot but I think you’re correct that it’ll get a jump from “NIO Day” I took a position today.

I took up a position in AH on Friday. Seemed like a good opportunity with being near 52wk low. They definitely displayed a lot of cool new shit, great projections for future sales in 25 countries (including US), and new models look pretty good.

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Definitely thinking of buying at open. Their new car entering European markets and looking good design wise and pricepoint wise should make it jump Monday.

I was scalping this on Friday for a few hundred bucks. I like its movement so far.

NIO is an interesting play. I am on long in NIO. I established my position in this stock more than a year ago and do have overall long term bullish outlook on it.

However there are a few things I did notice.

1). Looking at NIO Day 2020 (which occurred in Jan 2021) vs NIO Day 2021(which just occurred a day ago), last NIO day, the stock ran up from about two weeks before the event. This time around, NIO seemed to have dropped the last two weeks leading up to the event.

2). NIO day’s news to me was a mixed bag. Yes, there was info about the new ET7 release date (iirc late March 2022). Also new news about their new model the ET5. Also update on their charging system network and how it is expanding along with the continued expansion of the power swap stations. News to enter several European countries by 2022 (Germany, the Netherlands, Sweden and Denmark) and 25 by 2025.

The new model could be good news. This seems to be headed to tackle with Tesla’s Model 3. The pricing for the two vehicles in China after relevant subsidies have been applied are nearly the same.

Model 3 in China after subsidies is roughly 40k. ET5 is to be 40.5k after subsidies.

What concerns me about the ET5 is the fact that it could potentially pull away orders and sales from their ET7. The ET7 pre-orders are not locked in. They are set to start delivering in March but what if people cancel their orders and choose to wait for the cheaper ET5?

ET5 is smaller and cheaper. It is supposedly going to get more range out of the same battery that is in the ET7.

The ET7 is roughly 20k more expensive than the ET5 but not seeing the 20k value. Sure the ET7 is slightly larger with more power (480kW vs 360kW) and faster acceleration (3.9s 0-100kmh vs 4.3s 0-100kmh).

3). Investment on power swapping stations. One of the key points that NIO has over other companies is the ability for it to swap its batteries (their station does it within 5 minutes). So swapping a battery is much faster than charging a battery if you are near empty. It also has the ability to swap to different battery packs for more and less range.

However, my concern is that as battery technology develops and from news we have seen from TSLA or QS, we should be seeing supposedly new changes in higher density power packs. Less weight, more energy dense and potentially quicker charging. All this combined would serve to really reduce the ROI for all these power swap stations.

4). NIO at the end of Q3 2020 was around $22. Nio at Q3 2021 was around $34. It has diluted by approximately 400mil shares. From 1.2bil to 1.6bil shares outstanding. Nio is factoring in quite a bit of growth in its valuation at its current price.

5). The delisting news IMO was just pure media hype. This was the same issue it ran into back in Dec of 2020 and NIO already had said that “NIO’s spokeswoman said in an emailed statement that NIO was aware of the situation and became compliant over the past few months.”

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