Nio passes delivery guidance; Off to a great start in 2021

Shares of Nio (NIO) increased rapidly on the news that it passed delivery guidance and expectations. This year is already looking astronomically great for NIO stock investors.

According to a recent release, Nio has passed vehicle delivery expectations in the month of December with the company delivering 7,007 vehicles. This results to an increase of 121% year over year.

In the last three months, NIO delivered 17,353 vehicles in the three months ended December 2020, increasing by 111.0% year-over-year with NIO delivering 43,728 vehicles in 2020 in total, which results in an increase by 112.6% year-over-year. The cumulative deliveries of ES8, ES6 and EC6 as of December 31, 2020 reached 75,641.

Nio also launched a new service called Nio Certified, the company plans an investment of 3 billion yuan ($459.21 million) into this service over the next five years.

Nio said it has established a nationwide used car business network, providing a full-range of services including vehicle inspection, evaluation, acquisition and sales.

NIO Certified allows buyers to return their cars or ask for replacement within seven days after purchase. The cars bought through the service come with other freebies such as an extended warranty from the manufacturer for one year or 30,000 kilometers from the date of purchase, a free 7 kW Power Home, lifetime free roadside rescue, lifetime free car connectivity and the same battery-as-a-service program that comes with a new car.

The new service is seen as a move to accelerate the company’s sales momentum.

Tesla (TSLA) lowers price in bid for market share

With NIO gaining a gigantic market share in China and Tesla falling short of it’s 500,000 vehicle delivery results, this has lead Tesla to cut it’s price for vehicles in China more than three times this year, despite May’s price reductions. All vehicles received a 30% markdown.

Many investors pose the question on whether this price markdown would effect local EV makers like Nio, Xpeng, and Li Auto. In my opinion it may in the short term but stocks like Nio will continue to rise in the longer term.

Bottom line

Nio is catching up with rival Tesla, this year, I expect the EV sector to heat up as competitors in the EV space lash it out as they try to take market share.

Another thing to look at is Nio Day, the company confirmed that at the fourth Nio Day it will launch a new sedan model, while also sharing the latest developments in autonomous driving and other core technologies.

Nio stock is definitely a buy and hold and I expect great things in the months ahead.

Jay Lorrence
Jay Lorrence

Investor of 12 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.

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