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阳光总在風雨后
2021-05-14
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阳光总在風雨后
2021-06-28
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NIO: The Path To A $1 Trillion Valuation
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16:43","market":"us","language":"en","title":"NIO: The Path To A $1 Trillion Valuation","url":"https://stock-news.laohu8.com/highlight/detail?id=1124372919","media":"seekingalpha","summary":"NIO is known by many as a large cap Chinese electric vehicle company.However, it is actually much more than that and possesses several key competitive advantages.We discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.NIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\". Given that the mobility industry is becoming increasingly software-driven,","content":"<p><b>Summary</b></p>\n<ul>\n <li>NIO is known by many as a large cap Chinese electric vehicle company.</li>\n <li>However, it is actually much more than that and possesses several key competitive advantages.</li>\n <li>We discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/17cdcfe41a4b886c29dad01d4512e84e\" tg-width=\"1536\" tg-height=\"1024\" referrerpolicy=\"no-referrer\"><span>Lintao Zhang/Getty Images News</span></p>\n<p>Similar to how we analyzed Palantir(NYSE:PLTR)in our recent piece<i>Palantir: The Path To A $1 Trillion Valuation</i>, NIO Inc.(NYSE:NIO)is unique in that it is already a large cap stock, but has a massive growth runway that could quite conceivably make it a mega-cap stock and eventually even approach a valuation of $1 Trillion. Here are five reasons why it could successfully achieve that valuation:</p>\n<p><b>#1. \"Gas Station\" Of The Future</b></p>\n<p>NIO is a major designer and manufacturer of high-tech electric vehicles in China and as a result competes with the likes of Tesla(NASDAQ:TSLA)in innovative technologies like connectivity, batteries, autonomous mobility, and artificial intelligence.</p>\n<p>NIO's status as an emerging leader in these innovative technologies is perhaps the biggest reason to believe that they could become a multi-bagger from today's already lofty valuation and become a true mega cap.</p>\n<p>For example, its Battery-as-a-Service (BaaS) potential is immense. The company has already begun building out the infrastructure for this business through its recent partnership with Sinopec(NYSE:SHI)through which they aspire to create a 5,000 battery swap station network by 2024. This will give NIO a decisive network advantage in this space just as it begins to really take off in the world's largest electric vehicle market, enabling it to form partnerships with other automakers in the country and drive strong revenue growth from this business alone. Essentially, this would make NIO the number one \"gas station\" company in China as the country and world enter the age of electrification.</p>\n<p>Given that they possess hundreds of patents in battery swap technology, NIO seems to already have the intellectual property moat necessary to transform this potential into reality. It appears to be merely a matter of time for them to implement and scale now.</p>\n<p><b>#2. Autonomous Mobility & AI Technology</b></p>\n<p>NIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\"</p>\n<p>Given that the mobility industry is becoming increasingly software-driven, its intellectual property portfolio here is important as well. Even more important, though, is its competitive positioning to emerge as a long-term leader in the electric vehicle space in China, not only because of the vehicle sales potential it offers, but much more importantly because it is the largest source of consumer data in the world. As a result, NIO will have access to a vast amount of data with which it can improve its A.I. and build one of the best mobility software platforms in the world.</p>\n<p><b>#3. Government Support</b></p>\n<p>Another big reason to believe in NIO's long-term potential stems from the simple fact that it is a leading local company in China in high-priority technology fields. As a result, it will likely enjoy significant support from the Chinese government so that it can serve as a vehicle whereby China can advance its goals towards becoming the pre-eminent global technological superpower.</p>\n<p>This principle has already played out several times to NIO's benefit.</p>\n<p>For example, the government recently gave NIO a RMB7 billion (US$1b) bailout to give it the cash it needed to sustain and scale operations.</p>\n<p>Additionally, government-owned auto manufacturer - Anhui Jianghuai Automobile Group Corp - has also assisted NIO by providing it with manufacturing services, enabling it to scale with minimal additional capital investment.</p>\n<p>Perhaps the most glaring example of this was how the Chinese state media recently successfully harmed the reputation of TSLA - NIO's top foreign rival - to the point where the Elon Musk-led company had to issue an apology.</p>\n<p>Furthermore, the Chinese government is making a major push to transition the automotive market towards electric vehicles in an effort to battle its huge pollution problem. It is achieving these aims by offering purchase rebates and tax exemptions for the industry, while also placing restrictions on new gasoline and diesel powered vehicle permits.</p>\n<p><b>#4. Global Expansion</b></p>\n<p>NIO is also poised to begin expanding its sales into global markets, beginning with Norway. Not only will the company be selling its cars there, but it will be building out local physical and digital infrastructure to create a high quality user-friendly ecosystem to add value to its brand and bolster its competitive positioning. Once it has built significant scale in Norway, it will then have a greater position of strength from which to infiltrate the rest of the European market. Given the geopolitical tensions with the United States at the moment as well as Tesla's dominance in the U.S. electric vehicle market, Europe seems like a much more logical choice to begin global expansion.</p>\n<p><b>#5. Crunching The Numbers</b></p>\n<p>Electric Vehicle sales are already growing exponentially - especially in China - and we expect that number to explode much higher in the years to come.</p>\n<p><img src=\"https://static.tigerbbs.com/00cdeb70c618caeddbbd16df936194ad\" tg-width=\"960\" tg-height=\"572\"></p>\n<p>In fact, while just barely over 1.2 million electric vehicles were sold worldwide in 2017,Bloomberg New Energy Finance expects that number to soar to 60 million by 2040. Not only that, but battery and battery charging infrastructure demand will soar as well.</p>\n<p>If NIO can seize on its early leadership in China in both the electric vehicle and battery charging infrastructure businesses and also successfully scale its business internationally, there is certainly room for it to achieve a $1 trillion valuation by 2040. For example, its gross margin is expected to be nearly 20% in 2021 and 2022. TSLA's gross, meanwhile, is around 23% and its net margin is roughly half of that, or ~11.5%.</p>\n<p>NIO's BaaS business should also be higher margin given that it could be entirely automated and the actual real estate could be leased instead of owned in order to free up capital for higher return investment elsewhere. With continued scaling in both businesses and overall positive trends in the business with reduced costs across the board through automation and enhanced data analytics, we think gross margins of 25% and net margins of 15% by 2040 are entirely feasible.</p>\n<p>If NIO were to grab just 7.5% of the global EV market (TSLA's is currently 11%) by 2040, it would be selling ~4.5 million cars per year. We think this share is actually very feasible when you consider that the majority of electric vehicle sales are expected to be in China and that NIO has an inside track on that market given the support it is receiving from the government.</p>\n<p>If the average sale were for $40,000 per electric vehicle, its profit would be ~$6,000 per vehicle, translating to $27 billion in annual profit from auto sales alone. At a 30x price-to-earnings multiple, that would put the automotive business at a $810 billion valuation.</p>\n<p>Meanwhile, its BaaS business could likely generate $150 in profits per year per vehicle in its sphere in China. By 2030,it is estimated that there will be 50 million electric vehicles on the road in China and that EVs will account for 40% of total auto sales. A very conservative estimate is that the number of EVs on the road in China will double to 100 million by 2040. If NIO's BaaS business serves 20% of the electric vehicles in China by 2040, that would equate to an additional $3+ billion in annual net income. Once again applying a 30x price-to-earnings multiple, that would equate to roughly another $100 billion in market valuation.</p>\n<p>Meanwhile, the potential for using its data and autonomous vehicle technology as well as vast BaaS infrastructure to launch an autonomous taxi business network is also immense. While it is hard to know exactly what sort of value this would command as it is hard to project how it would be regulated by the Chinese government and how well consumers would adopt it, it is not a stretch that NIO's scale and capabilities by this point in such a potentially massive market as is offered in China would put the valuation for this business at $100 billion.</p>\n<p>Combining all three businesses gets us to a $1 trillion total valuation under a bullish, but not entirely implausible scenario.</p>\n<p><b>Risk Analysis</b></p>\n<p>While the path to $1 trillion certainly looks viable, there are numerous risks to consider along the way.</p>\n<p>First and foremost, NIO faces a lot of competition from both foreign and domestic companies. TSLA has a large presence in China and overseas and sports a premium brand to go along with an extremely driven and innovative CEO and engineering team. While the Chinese government has helped NIO some already with surviving the TSLA threat, it is unknown the depths that it will have to and be willing to go to continue giving NIO a boost to sustain its competitive standing in its domestic market.</p>\n<p>Of course, NIO also faces competitive pressures from fellow Chinese electric vehicle manufacturers including Baidu(NASDAQ:BIDU), which already has a partnership with a government-owned automaker (BAIC Group) to put 1,000 driverless cars on the roads over the next 3 years as a prelude to establishing an autonomous taxi service in China. Facing off against fellow major domestic players who also have government backing poses another threat to NIO because it means that it cannot solely rely on government assistance to survive and thrive.</p>\n<p>On that same note, it also increases the political risk for NIO. Given that it is not the only horse that China is betting on in the mobility space, if their leadership were to run afoul of the Chinese Communist Party and/or they were to simply lag behind in performance, they could quickly be \"dropped\" by the government and the business could fall into a downward spiral. If Alibaba(NYSE:BABA) could face this, NIO certainly could too. If nothing else, the Chinese government could easily seize some or all of NIO's physical or intellectual property for state use, depriving NIO shareholders of much of their equity value.</p>\n<p>Furthermore, expanding overseas could also be complicated by the fact that China is currently dealing with growing geopolitical tensions with other Asia-Pacific nations, Europe, and the United States. As a result, trade barriers may go up, especially in such high-priority technologies as mobility and autonomous technology. The U.S., Europe, Japan, Korea, and even India have well-established automobile industries and if they feel threatened by a Chinese competitor, they may well decide to throw up barriers to entry in their markets.</p>\n<p>Of course, as the China hustle pointed out, many Chinese companies have a troubling track record of fudging accounting numbers. As a result, investors should always view Chinese company - to include NIO's - financial numbers with a healthy dose of skepticism. While it is very possible - if not likely - that NIO's numbers are completely accurate, it is still a risk that needs to be considered.</p>\n<p>Last, but not least, NIO is currently priced quite expensively as it is still running up massive losses and trades at 71 times expected 2021 gross income. Therefore, the range of potential future outcomes is quite wide and investors could very well be dramatically overpaying by purchasing at today's prices. It should be viewed as a highly speculative investment accordingly.</p>\n<p><b>Investor Takeaway</b></p>\n<p>NIO is currently struggling to turn a profit and has had to be bailed out by the Chinese government. At the same time, its valuation is sky-high. While this might steer many investors away and the stock is indeed a very speculative investment, there is also a plausible path for the company to become a $1 trillion mega cap by 2040 and generate attractive long-term returns for investors as a result.</p>\n<p>While not for the faint of heart and certainly not without risks, NIO could continue on its path towards becoming one of the world's pre-eminent mobility companies.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NIO: The Path To A $1 Trillion Valuation</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNIO: The Path To A $1 Trillion Valuation\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-28 16:43 GMT+8 <a href=https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nNIO is known by many as a large cap Chinese electric vehicle company.\nHowever, it is actually much more than that and possesses several key competitive advantages.\nWe discuss how these ...</p>\n\n<a href=\"https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1124372919","content_text":"Summary\n\nNIO is known by many as a large cap Chinese electric vehicle company.\nHowever, it is actually much more than that and possesses several key competitive advantages.\nWe discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.\n\nLintao Zhang/Getty Images News\nSimilar to how we analyzed Palantir(NYSE:PLTR)in our recent piecePalantir: The Path To A $1 Trillion Valuation, NIO Inc.(NYSE:NIO)is unique in that it is already a large cap stock, but has a massive growth runway that could quite conceivably make it a mega-cap stock and eventually even approach a valuation of $1 Trillion. Here are five reasons why it could successfully achieve that valuation:\n#1. \"Gas Station\" Of The Future\nNIO is a major designer and manufacturer of high-tech electric vehicles in China and as a result competes with the likes of Tesla(NASDAQ:TSLA)in innovative technologies like connectivity, batteries, autonomous mobility, and artificial intelligence.\nNIO's status as an emerging leader in these innovative technologies is perhaps the biggest reason to believe that they could become a multi-bagger from today's already lofty valuation and become a true mega cap.\nFor example, its Battery-as-a-Service (BaaS) potential is immense. The company has already begun building out the infrastructure for this business through its recent partnership with Sinopec(NYSE:SHI)through which they aspire to create a 5,000 battery swap station network by 2024. This will give NIO a decisive network advantage in this space just as it begins to really take off in the world's largest electric vehicle market, enabling it to form partnerships with other automakers in the country and drive strong revenue growth from this business alone. Essentially, this would make NIO the number one \"gas station\" company in China as the country and world enter the age of electrification.\nGiven that they possess hundreds of patents in battery swap technology, NIO seems to already have the intellectual property moat necessary to transform this potential into reality. It appears to be merely a matter of time for them to implement and scale now.\n#2. Autonomous Mobility & AI Technology\nNIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\"\nGiven that the mobility industry is becoming increasingly software-driven, its intellectual property portfolio here is important as well. Even more important, though, is its competitive positioning to emerge as a long-term leader in the electric vehicle space in China, not only because of the vehicle sales potential it offers, but much more importantly because it is the largest source of consumer data in the world. As a result, NIO will have access to a vast amount of data with which it can improve its A.I. and build one of the best mobility software platforms in the world.\n#3. Government Support\nAnother big reason to believe in NIO's long-term potential stems from the simple fact that it is a leading local company in China in high-priority technology fields. As a result, it will likely enjoy significant support from the Chinese government so that it can serve as a vehicle whereby China can advance its goals towards becoming the pre-eminent global technological superpower.\nThis principle has already played out several times to NIO's benefit.\nFor example, the government recently gave NIO a RMB7 billion (US$1b) bailout to give it the cash it needed to sustain and scale operations.\nAdditionally, government-owned auto manufacturer - Anhui Jianghuai Automobile Group Corp - has also assisted NIO by providing it with manufacturing services, enabling it to scale with minimal additional capital investment.\nPerhaps the most glaring example of this was how the Chinese state media recently successfully harmed the reputation of TSLA - NIO's top foreign rival - to the point where the Elon Musk-led company had to issue an apology.\nFurthermore, the Chinese government is making a major push to transition the automotive market towards electric vehicles in an effort to battle its huge pollution problem. It is achieving these aims by offering purchase rebates and tax exemptions for the industry, while also placing restrictions on new gasoline and diesel powered vehicle permits.\n#4. Global Expansion\nNIO is also poised to begin expanding its sales into global markets, beginning with Norway. Not only will the company be selling its cars there, but it will be building out local physical and digital infrastructure to create a high quality user-friendly ecosystem to add value to its brand and bolster its competitive positioning. Once it has built significant scale in Norway, it will then have a greater position of strength from which to infiltrate the rest of the European market. Given the geopolitical tensions with the United States at the moment as well as Tesla's dominance in the U.S. electric vehicle market, Europe seems like a much more logical choice to begin global expansion.\n#5. Crunching The Numbers\nElectric Vehicle sales are already growing exponentially - especially in China - and we expect that number to explode much higher in the years to come.\n\nIn fact, while just barely over 1.2 million electric vehicles were sold worldwide in 2017,Bloomberg New Energy Finance expects that number to soar to 60 million by 2040. Not only that, but battery and battery charging infrastructure demand will soar as well.\nIf NIO can seize on its early leadership in China in both the electric vehicle and battery charging infrastructure businesses and also successfully scale its business internationally, there is certainly room for it to achieve a $1 trillion valuation by 2040. For example, its gross margin is expected to be nearly 20% in 2021 and 2022. TSLA's gross, meanwhile, is around 23% and its net margin is roughly half of that, or ~11.5%.\nNIO's BaaS business should also be higher margin given that it could be entirely automated and the actual real estate could be leased instead of owned in order to free up capital for higher return investment elsewhere. With continued scaling in both businesses and overall positive trends in the business with reduced costs across the board through automation and enhanced data analytics, we think gross margins of 25% and net margins of 15% by 2040 are entirely feasible.\nIf NIO were to grab just 7.5% of the global EV market (TSLA's is currently 11%) by 2040, it would be selling ~4.5 million cars per year. We think this share is actually very feasible when you consider that the majority of electric vehicle sales are expected to be in China and that NIO has an inside track on that market given the support it is receiving from the government.\nIf the average sale were for $40,000 per electric vehicle, its profit would be ~$6,000 per vehicle, translating to $27 billion in annual profit from auto sales alone. At a 30x price-to-earnings multiple, that would put the automotive business at a $810 billion valuation.\nMeanwhile, its BaaS business could likely generate $150 in profits per year per vehicle in its sphere in China. By 2030,it is estimated that there will be 50 million electric vehicles on the road in China and that EVs will account for 40% of total auto sales. A very conservative estimate is that the number of EVs on the road in China will double to 100 million by 2040. If NIO's BaaS business serves 20% of the electric vehicles in China by 2040, that would equate to an additional $3+ billion in annual net income. Once again applying a 30x price-to-earnings multiple, that would equate to roughly another $100 billion in market valuation.\nMeanwhile, the potential for using its data and autonomous vehicle technology as well as vast BaaS infrastructure to launch an autonomous taxi business network is also immense. While it is hard to know exactly what sort of value this would command as it is hard to project how it would be regulated by the Chinese government and how well consumers would adopt it, it is not a stretch that NIO's scale and capabilities by this point in such a potentially massive market as is offered in China would put the valuation for this business at $100 billion.\nCombining all three businesses gets us to a $1 trillion total valuation under a bullish, but not entirely implausible scenario.\nRisk Analysis\nWhile the path to $1 trillion certainly looks viable, there are numerous risks to consider along the way.\nFirst and foremost, NIO faces a lot of competition from both foreign and domestic companies. TSLA has a large presence in China and overseas and sports a premium brand to go along with an extremely driven and innovative CEO and engineering team. While the Chinese government has helped NIO some already with surviving the TSLA threat, it is unknown the depths that it will have to and be willing to go to continue giving NIO a boost to sustain its competitive standing in its domestic market.\nOf course, NIO also faces competitive pressures from fellow Chinese electric vehicle manufacturers including Baidu(NASDAQ:BIDU), which already has a partnership with a government-owned automaker (BAIC Group) to put 1,000 driverless cars on the roads over the next 3 years as a prelude to establishing an autonomous taxi service in China. Facing off against fellow major domestic players who also have government backing poses another threat to NIO because it means that it cannot solely rely on government assistance to survive and thrive.\nOn that same note, it also increases the political risk for NIO. Given that it is not the only horse that China is betting on in the mobility space, if their leadership were to run afoul of the Chinese Communist Party and/or they were to simply lag behind in performance, they could quickly be \"dropped\" by the government and the business could fall into a downward spiral. If Alibaba(NYSE:BABA) could face this, NIO certainly could too. If nothing else, the Chinese government could easily seize some or all of NIO's physical or intellectual property for state use, depriving NIO shareholders of much of their equity value.\nFurthermore, expanding overseas could also be complicated by the fact that China is currently dealing with growing geopolitical tensions with other Asia-Pacific nations, Europe, and the United States. As a result, trade barriers may go up, especially in such high-priority technologies as mobility and autonomous technology. The U.S., Europe, Japan, Korea, and even India have well-established automobile industries and if they feel threatened by a Chinese competitor, they may well decide to throw up barriers to entry in their markets.\nOf course, as the China hustle pointed out, many Chinese companies have a troubling track record of fudging accounting numbers. As a result, investors should always view Chinese company - to include NIO's - financial numbers with a healthy dose of skepticism. While it is very possible - if not likely - that NIO's numbers are completely accurate, it is still a risk that needs to be considered.\nLast, but not least, NIO is currently priced quite expensively as it is still running up massive losses and trades at 71 times expected 2021 gross income. Therefore, the range of potential future outcomes is quite wide and investors could very well be dramatically overpaying by purchasing at today's prices. It should be viewed as a highly speculative investment accordingly.\nInvestor Takeaway\nNIO is currently struggling to turn a profit and has had to be bailed out by the Chinese government. At the same time, its valuation is sky-high. While this might steer many investors away and the stock is indeed a very speculative investment, there is also a plausible path for the company to become a $1 trillion mega cap by 2040 and generate attractive long-term returns for investors as a result.\nWhile not for the faint of heart and certainly not without risks, NIO could continue on its path towards becoming one of the world's pre-eminent mobility companies.","news_type":1},"isVote":1,"tweetType":1,"viewCount":293,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":198339805,"gmtCreate":1620923871107,"gmtModify":1704350624902,"author":{"id":"3496875184649920","authorId":"3496875184649920","name":"阳光总在風雨后","avatar":"https://static.tigerbbs.com/520a456d0397b5810c0f55c66a1000d8","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3496875184649920","authorIdStr":"3496875184649920"},"themes":[],"htmlText":"test！","listText":"test！","text":"test！","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/198339805","repostId":"1139650826","repostType":2,"repost":{"id":"1139650826","kind":"news","pubTimestamp":1620918825,"share":"https://ttm.financial/m/news/1139650826?lang=&edition=fundamental","pubTime":"2021-05-13 23:13","market":"us","language":"en","title":"China’s New National EV Battery Swap Standard Is Great News for Nio Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=1139650826","media":"InvestorPlace","summary":"New safety regulations governing BaaS are good news for NIO stock.\n\nChinese EV makerNio (NYSE:NIO) h","content":"<blockquote>\n New safety regulations governing BaaS are good news for NIO stock.\n</blockquote>\n<p>Chinese EV maker<b>Nio</b> (NYSE:<b><u>NIO</u></b>) has been in a strong position over the past year. Its current stock price — down roughly 45% from a February all-time high — may not reflect that, but Nio is humming. The company is churning out EVs at a record pace, it has expanded beyond SUVs and crossovers with a new sedan and its Battery as a Service (BaaS) is making waves. That brings us to an interesting issue. The Chinese government has just announced the country’s first national battery swap safety standard. What does this news mean for NIO stock?</p>\n<p>With a national standard in place, that suggests the possibility that other EV makers are moving toward the idea of battery swapping. If they did, Nio would lose its BaaS advantage.</p>\n<p>Does that mean more pain in store for slumping NIO stock? While there may indeed end up being more players, I think the new regulations will have the opposite effect.</p>\n<p><b>What Is BaaS?</b></p>\n<p>Nio isn’t the first EV company to introduce the idea of battery swapping. Israel’s<b>Better Place</b>was an EV maker that used the same strategy. The companybuilt dozens of robotic battery swapping stations in roadside service centers. They could replace the battery in a Better Place car in under five minutes. However, in this case the EV market was just too new, and the technology too costly. Those battery swapping stations that were projected to cost $500,000 each ended up costing $2 million a pop. Better Place went belly up in 2013.</p>\n<p>Nio has correctly surmised that battery swapping will be more popular in China. In comparison to countries like the U.S., where single-family zoning “is practically gospel,” huge residential buildings dominate China’s megacities. Adding a charge station to a single-family home is no big deal. Adding enough charge stations to a massive residential tower to support all the EV owners who live there? That’s a big challenge. Battery swapping stations make sense in this situation.</p>\n<p>Nio’s version of battery swapping is a more developed version of what Better Place attempted. At the time itlaunched BaaS in August 2020, Nio owned over 1,200 patents related to battery swapping. It had already built a network of 143 battery swap stations across China. In addition, the company positioned BaaS as a strong incentive for customers. They can save thousands of dollars off the purchase price of their Nio EV by instead paying a monthly battery fee. This also gives them the flexibility to opt for batteries of a different capacity if their needs change.</p>\n<p>As of March, Nio had reportedlycompleted over 1.1 million battery exchangesand was on track to have 500 battery swap stations online by the end of this year. There is no doubt that BaaS has been a big part of the growth in NIO stock, which accelerated last fall.</p>\n<p><b>The New Battery Swap Safety Standard</b></p>\n<p>This takes us to the recent announcement that the Chinese government has approved theNational Standard for Battery Swap Safety Requirements for Electric Vehicles, which will go into effect on Nov. 1. A national standard comes with the implication that other EV companies are making the move to battery swapping.</p>\n<p>If it were to lose its advantage as the only mainstream Chinese EV maker to offer BaaS, does that spell trouble for Nio?</p>\n<p>Far from it. Nio was actually part of the drafting of these regulations. The rules are specific to issues like safety, design and environmental issues. For example, EVs using snap-on batteries must be able to support at least 5,000 battery swaps.</p>\n<p>If anything, having the safety standard in place is going to make Chinese consumers<i>more</i>likely to choose Nio and BaaS over a traditional, plug-in to charge EVs. Safety standards lead to consumer confidence.</p>\n<p><b>Bottom Line on NIO Stock</b></p>\n<p>NIO stock has an ‘A’ rating in<i>Portfolio Grader</i>. This is a leading player in the Chinese EV market that hashad its issues in the past, but is now humming.</p>\n<p>Having the Chinese government issue regulations that add even more legitimacy to its BaaS is only good news. I’ve said before that its current slump makes NIO stocka great opportunityto pick up an EV stock with long-term growth written all over it. That still stands.</p>\n<p>Now trading around $34, NIO shares are more tempting than ever.</p>\n<p><i>On the date of publication, Louis Navellier had a long position in NIO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.</i></p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>China’s New National EV Battery Swap Standard Is Great News for Nio Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nChina’s New National EV Battery Swap Standard Is Great News for Nio Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-13 23:13 GMT+8 <a href=https://investorplace.com/2021/05/chinas-new-national-ev-battery-swap-standard-is-great-news-for-nio-stock/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>New safety regulations governing BaaS are good news for NIO stock.\n\nChinese EV makerNio (NYSE:NIO) has been in a strong position over the past year. Its current stock price — down roughly 45% from a ...</p>\n\n<a href=\"https://investorplace.com/2021/05/chinas-new-national-ev-battery-swap-standard-is-great-news-for-nio-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NIO":"蔚来"},"source_url":"https://investorplace.com/2021/05/chinas-new-national-ev-battery-swap-standard-is-great-news-for-nio-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1139650826","content_text":"New safety regulations governing BaaS are good news for NIO stock.\n\nChinese EV makerNio (NYSE:NIO) has been in a strong position over the past year. Its current stock price — down roughly 45% from a February all-time high — may not reflect that, but Nio is humming. The company is churning out EVs at a record pace, it has expanded beyond SUVs and crossovers with a new sedan and its Battery as a Service (BaaS) is making waves. That brings us to an interesting issue. The Chinese government has just announced the country’s first national battery swap safety standard. What does this news mean for NIO stock?\nWith a national standard in place, that suggests the possibility that other EV makers are moving toward the idea of battery swapping. If they did, Nio would lose its BaaS advantage.\nDoes that mean more pain in store for slumping NIO stock? While there may indeed end up being more players, I think the new regulations will have the opposite effect.\nWhat Is BaaS?\nNio isn’t the first EV company to introduce the idea of battery swapping. Israel’sBetter Placewas an EV maker that used the same strategy. The companybuilt dozens of robotic battery swapping stations in roadside service centers. They could replace the battery in a Better Place car in under five minutes. However, in this case the EV market was just too new, and the technology too costly. Those battery swapping stations that were projected to cost $500,000 each ended up costing $2 million a pop. Better Place went belly up in 2013.\nNio has correctly surmised that battery swapping will be more popular in China. In comparison to countries like the U.S., where single-family zoning “is practically gospel,” huge residential buildings dominate China’s megacities. Adding a charge station to a single-family home is no big deal. Adding enough charge stations to a massive residential tower to support all the EV owners who live there? That’s a big challenge. Battery swapping stations make sense in this situation.\nNio’s version of battery swapping is a more developed version of what Better Place attempted. At the time itlaunched BaaS in August 2020, Nio owned over 1,200 patents related to battery swapping. It had already built a network of 143 battery swap stations across China. In addition, the company positioned BaaS as a strong incentive for customers. They can save thousands of dollars off the purchase price of their Nio EV by instead paying a monthly battery fee. This also gives them the flexibility to opt for batteries of a different capacity if their needs change.\nAs of March, Nio had reportedlycompleted over 1.1 million battery exchangesand was on track to have 500 battery swap stations online by the end of this year. There is no doubt that BaaS has been a big part of the growth in NIO stock, which accelerated last fall.\nThe New Battery Swap Safety Standard\nThis takes us to the recent announcement that the Chinese government has approved theNational Standard for Battery Swap Safety Requirements for Electric Vehicles, which will go into effect on Nov. 1. A national standard comes with the implication that other EV companies are making the move to battery swapping.\nIf it were to lose its advantage as the only mainstream Chinese EV maker to offer BaaS, does that spell trouble for Nio?\nFar from it. Nio was actually part of the drafting of these regulations. The rules are specific to issues like safety, design and environmental issues. For example, EVs using snap-on batteries must be able to support at least 5,000 battery swaps.\nIf anything, having the safety standard in place is going to make Chinese consumersmorelikely to choose Nio and BaaS over a traditional, plug-in to charge EVs. Safety standards lead to consumer confidence.\nBottom Line on NIO Stock\nNIO stock has an ‘A’ rating inPortfolio Grader. This is a leading player in the Chinese EV market that hashad its issues in the past, but is now humming.\nHaving the Chinese government issue regulations that add even more legitimacy to its BaaS is only good news. I’ve said before that its current slump makes NIO stocka great opportunityto pick up an EV stock with long-term growth written all over it. That still stands.\nNow trading around $34, NIO shares are more tempting than ever.\nOn the date of publication, Louis Navellier had a long position in NIO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.","news_type":1},"isVote":1,"tweetType":1,"viewCount":458,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":198339805,"gmtCreate":1620923871107,"gmtModify":1704350624902,"author":{"id":"3496875184649920","authorId":"3496875184649920","name":"阳光总在風雨后","avatar":"https://static.tigerbbs.com/520a456d0397b5810c0f55c66a1000d8","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3496875184649920","idStr":"3496875184649920"},"themes":[],"htmlText":"test！","listText":"test！","text":"test！","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/198339805","repostId":"1139650826","repostType":2,"isVote":1,"tweetType":1,"viewCount":458,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150093234,"gmtCreate":1624873208428,"gmtModify":1703846725219,"author":{"id":"3496875184649920","authorId":"3496875184649920","name":"阳光总在風雨后","avatar":"https://static.tigerbbs.com/520a456d0397b5810c0f55c66a1000d8","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3496875184649920","idStr":"3496875184649920"},"themes":[],"htmlText":"test，test","listText":"test，test","text":"test，test","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/150093234","repostId":"1124372919","repostType":2,"repost":{"id":"1124372919","kind":"news","pubTimestamp":1624869783,"share":"https://ttm.financial/m/news/1124372919?lang=&edition=fundamental","pubTime":"2021-06-28 16:43","market":"us","language":"en","title":"NIO: The Path To A $1 Trillion Valuation","url":"https://stock-news.laohu8.com/highlight/detail?id=1124372919","media":"seekingalpha","summary":"NIO is known by many as a large cap Chinese electric vehicle company.However, it is actually much more than that and possesses several key competitive advantages.We discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.NIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\". Given that the mobility industry is becoming increasingly software-driven,","content":"<p><b>Summary</b></p>\n<ul>\n <li>NIO is known by many as a large cap Chinese electric vehicle company.</li>\n <li>However, it is actually much more than that and possesses several key competitive advantages.</li>\n <li>We discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/17cdcfe41a4b886c29dad01d4512e84e\" tg-width=\"1536\" tg-height=\"1024\" referrerpolicy=\"no-referrer\"><span>Lintao Zhang/Getty Images News</span></p>\n<p>Similar to how we analyzed Palantir(NYSE:PLTR)in our recent piece<i>Palantir: The Path To A $1 Trillion Valuation</i>, NIO Inc.(NYSE:NIO)is unique in that it is already a large cap stock, but has a massive growth runway that could quite conceivably make it a mega-cap stock and eventually even approach a valuation of $1 Trillion. Here are five reasons why it could successfully achieve that valuation:</p>\n<p><b>#1. \"Gas Station\" Of The Future</b></p>\n<p>NIO is a major designer and manufacturer of high-tech electric vehicles in China and as a result competes with the likes of Tesla(NASDAQ:TSLA)in innovative technologies like connectivity, batteries, autonomous mobility, and artificial intelligence.</p>\n<p>NIO's status as an emerging leader in these innovative technologies is perhaps the biggest reason to believe that they could become a multi-bagger from today's already lofty valuation and become a true mega cap.</p>\n<p>For example, its Battery-as-a-Service (BaaS) potential is immense. The company has already begun building out the infrastructure for this business through its recent partnership with Sinopec(NYSE:SHI)through which they aspire to create a 5,000 battery swap station network by 2024. This will give NIO a decisive network advantage in this space just as it begins to really take off in the world's largest electric vehicle market, enabling it to form partnerships with other automakers in the country and drive strong revenue growth from this business alone. Essentially, this would make NIO the number one \"gas station\" company in China as the country and world enter the age of electrification.</p>\n<p>Given that they possess hundreds of patents in battery swap technology, NIO seems to already have the intellectual property moat necessary to transform this potential into reality. It appears to be merely a matter of time for them to implement and scale now.</p>\n<p><b>#2. Autonomous Mobility & AI Technology</b></p>\n<p>NIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\"</p>\n<p>Given that the mobility industry is becoming increasingly software-driven, its intellectual property portfolio here is important as well. Even more important, though, is its competitive positioning to emerge as a long-term leader in the electric vehicle space in China, not only because of the vehicle sales potential it offers, but much more importantly because it is the largest source of consumer data in the world. As a result, NIO will have access to a vast amount of data with which it can improve its A.I. and build one of the best mobility software platforms in the world.</p>\n<p><b>#3. Government Support</b></p>\n<p>Another big reason to believe in NIO's long-term potential stems from the simple fact that it is a leading local company in China in high-priority technology fields. As a result, it will likely enjoy significant support from the Chinese government so that it can serve as a vehicle whereby China can advance its goals towards becoming the pre-eminent global technological superpower.</p>\n<p>This principle has already played out several times to NIO's benefit.</p>\n<p>For example, the government recently gave NIO a RMB7 billion (US$1b) bailout to give it the cash it needed to sustain and scale operations.</p>\n<p>Additionally, government-owned auto manufacturer - Anhui Jianghuai Automobile Group Corp - has also assisted NIO by providing it with manufacturing services, enabling it to scale with minimal additional capital investment.</p>\n<p>Perhaps the most glaring example of this was how the Chinese state media recently successfully harmed the reputation of TSLA - NIO's top foreign rival - to the point where the Elon Musk-led company had to issue an apology.</p>\n<p>Furthermore, the Chinese government is making a major push to transition the automotive market towards electric vehicles in an effort to battle its huge pollution problem. It is achieving these aims by offering purchase rebates and tax exemptions for the industry, while also placing restrictions on new gasoline and diesel powered vehicle permits.</p>\n<p><b>#4. Global Expansion</b></p>\n<p>NIO is also poised to begin expanding its sales into global markets, beginning with Norway. Not only will the company be selling its cars there, but it will be building out local physical and digital infrastructure to create a high quality user-friendly ecosystem to add value to its brand and bolster its competitive positioning. Once it has built significant scale in Norway, it will then have a greater position of strength from which to infiltrate the rest of the European market. Given the geopolitical tensions with the United States at the moment as well as Tesla's dominance in the U.S. electric vehicle market, Europe seems like a much more logical choice to begin global expansion.</p>\n<p><b>#5. Crunching The Numbers</b></p>\n<p>Electric Vehicle sales are already growing exponentially - especially in China - and we expect that number to explode much higher in the years to come.</p>\n<p><img src=\"https://static.tigerbbs.com/00cdeb70c618caeddbbd16df936194ad\" tg-width=\"960\" tg-height=\"572\"></p>\n<p>In fact, while just barely over 1.2 million electric vehicles were sold worldwide in 2017,Bloomberg New Energy Finance expects that number to soar to 60 million by 2040. Not only that, but battery and battery charging infrastructure demand will soar as well.</p>\n<p>If NIO can seize on its early leadership in China in both the electric vehicle and battery charging infrastructure businesses and also successfully scale its business internationally, there is certainly room for it to achieve a $1 trillion valuation by 2040. For example, its gross margin is expected to be nearly 20% in 2021 and 2022. TSLA's gross, meanwhile, is around 23% and its net margin is roughly half of that, or ~11.5%.</p>\n<p>NIO's BaaS business should also be higher margin given that it could be entirely automated and the actual real estate could be leased instead of owned in order to free up capital for higher return investment elsewhere. With continued scaling in both businesses and overall positive trends in the business with reduced costs across the board through automation and enhanced data analytics, we think gross margins of 25% and net margins of 15% by 2040 are entirely feasible.</p>\n<p>If NIO were to grab just 7.5% of the global EV market (TSLA's is currently 11%) by 2040, it would be selling ~4.5 million cars per year. We think this share is actually very feasible when you consider that the majority of electric vehicle sales are expected to be in China and that NIO has an inside track on that market given the support it is receiving from the government.</p>\n<p>If the average sale were for $40,000 per electric vehicle, its profit would be ~$6,000 per vehicle, translating to $27 billion in annual profit from auto sales alone. At a 30x price-to-earnings multiple, that would put the automotive business at a $810 billion valuation.</p>\n<p>Meanwhile, its BaaS business could likely generate $150 in profits per year per vehicle in its sphere in China. By 2030,it is estimated that there will be 50 million electric vehicles on the road in China and that EVs will account for 40% of total auto sales. A very conservative estimate is that the number of EVs on the road in China will double to 100 million by 2040. If NIO's BaaS business serves 20% of the electric vehicles in China by 2040, that would equate to an additional $3+ billion in annual net income. Once again applying a 30x price-to-earnings multiple, that would equate to roughly another $100 billion in market valuation.</p>\n<p>Meanwhile, the potential for using its data and autonomous vehicle technology as well as vast BaaS infrastructure to launch an autonomous taxi business network is also immense. While it is hard to know exactly what sort of value this would command as it is hard to project how it would be regulated by the Chinese government and how well consumers would adopt it, it is not a stretch that NIO's scale and capabilities by this point in such a potentially massive market as is offered in China would put the valuation for this business at $100 billion.</p>\n<p>Combining all three businesses gets us to a $1 trillion total valuation under a bullish, but not entirely implausible scenario.</p>\n<p><b>Risk Analysis</b></p>\n<p>While the path to $1 trillion certainly looks viable, there are numerous risks to consider along the way.</p>\n<p>First and foremost, NIO faces a lot of competition from both foreign and domestic companies. TSLA has a large presence in China and overseas and sports a premium brand to go along with an extremely driven and innovative CEO and engineering team. While the Chinese government has helped NIO some already with surviving the TSLA threat, it is unknown the depths that it will have to and be willing to go to continue giving NIO a boost to sustain its competitive standing in its domestic market.</p>\n<p>Of course, NIO also faces competitive pressures from fellow Chinese electric vehicle manufacturers including Baidu(NASDAQ:BIDU), which already has a partnership with a government-owned automaker (BAIC Group) to put 1,000 driverless cars on the roads over the next 3 years as a prelude to establishing an autonomous taxi service in China. Facing off against fellow major domestic players who also have government backing poses another threat to NIO because it means that it cannot solely rely on government assistance to survive and thrive.</p>\n<p>On that same note, it also increases the political risk for NIO. Given that it is not the only horse that China is betting on in the mobility space, if their leadership were to run afoul of the Chinese Communist Party and/or they were to simply lag behind in performance, they could quickly be \"dropped\" by the government and the business could fall into a downward spiral. If Alibaba(NYSE:BABA) could face this, NIO certainly could too. If nothing else, the Chinese government could easily seize some or all of NIO's physical or intellectual property for state use, depriving NIO shareholders of much of their equity value.</p>\n<p>Furthermore, expanding overseas could also be complicated by the fact that China is currently dealing with growing geopolitical tensions with other Asia-Pacific nations, Europe, and the United States. As a result, trade barriers may go up, especially in such high-priority technologies as mobility and autonomous technology. The U.S., Europe, Japan, Korea, and even India have well-established automobile industries and if they feel threatened by a Chinese competitor, they may well decide to throw up barriers to entry in their markets.</p>\n<p>Of course, as the China hustle pointed out, many Chinese companies have a troubling track record of fudging accounting numbers. As a result, investors should always view Chinese company - to include NIO's - financial numbers with a healthy dose of skepticism. While it is very possible - if not likely - that NIO's numbers are completely accurate, it is still a risk that needs to be considered.</p>\n<p>Last, but not least, NIO is currently priced quite expensively as it is still running up massive losses and trades at 71 times expected 2021 gross income. Therefore, the range of potential future outcomes is quite wide and investors could very well be dramatically overpaying by purchasing at today's prices. It should be viewed as a highly speculative investment accordingly.</p>\n<p><b>Investor Takeaway</b></p>\n<p>NIO is currently struggling to turn a profit and has had to be bailed out by the Chinese government. At the same time, its valuation is sky-high. While this might steer many investors away and the stock is indeed a very speculative investment, there is also a plausible path for the company to become a $1 trillion mega cap by 2040 and generate attractive long-term returns for investors as a result.</p>\n<p>While not for the faint of heart and certainly not without risks, NIO could continue on its path towards becoming one of the world's pre-eminent mobility companies.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NIO: The Path To A $1 Trillion Valuation</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNIO: The Path To A $1 Trillion Valuation\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-28 16:43 GMT+8 <a href=https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nNIO is known by many as a large cap Chinese electric vehicle company.\nHowever, it is actually much more than that and possesses several key competitive advantages.\nWe discuss how these ...</p>\n\n<a href=\"https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4436753-nio-the-path-to-a-1-trillion-valuation","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1124372919","content_text":"Summary\n\nNIO is known by many as a large cap Chinese electric vehicle company.\nHowever, it is actually much more than that and possesses several key competitive advantages.\nWe discuss how these factors could combine with its focus on China to transform it into a $1 trillion mega cap.\n\nLintao Zhang/Getty Images News\nSimilar to how we analyzed Palantir(NYSE:PLTR)in our recent piecePalantir: The Path To A $1 Trillion Valuation, NIO Inc.(NYSE:NIO)is unique in that it is already a large cap stock, but has a massive growth runway that could quite conceivably make it a mega-cap stock and eventually even approach a valuation of $1 Trillion. Here are five reasons why it could successfully achieve that valuation:\n#1. \"Gas Station\" Of The Future\nNIO is a major designer and manufacturer of high-tech electric vehicles in China and as a result competes with the likes of Tesla(NASDAQ:TSLA)in innovative technologies like connectivity, batteries, autonomous mobility, and artificial intelligence.\nNIO's status as an emerging leader in these innovative technologies is perhaps the biggest reason to believe that they could become a multi-bagger from today's already lofty valuation and become a true mega cap.\nFor example, its Battery-as-a-Service (BaaS) potential is immense. The company has already begun building out the infrastructure for this business through its recent partnership with Sinopec(NYSE:SHI)through which they aspire to create a 5,000 battery swap station network by 2024. This will give NIO a decisive network advantage in this space just as it begins to really take off in the world's largest electric vehicle market, enabling it to form partnerships with other automakers in the country and drive strong revenue growth from this business alone. Essentially, this would make NIO the number one \"gas station\" company in China as the country and world enter the age of electrification.\nGiven that they possess hundreds of patents in battery swap technology, NIO seems to already have the intellectual property moat necessary to transform this potential into reality. It appears to be merely a matter of time for them to implement and scale now.\n#2. Autonomous Mobility & AI Technology\nNIO also has a strong foothold on autonomous mobility technology thanks to filing nearly 50 patents in the area and boasts AI-powered smart \"cockpits.\"\nGiven that the mobility industry is becoming increasingly software-driven, its intellectual property portfolio here is important as well. Even more important, though, is its competitive positioning to emerge as a long-term leader in the electric vehicle space in China, not only because of the vehicle sales potential it offers, but much more importantly because it is the largest source of consumer data in the world. As a result, NIO will have access to a vast amount of data with which it can improve its A.I. and build one of the best mobility software platforms in the world.\n#3. Government Support\nAnother big reason to believe in NIO's long-term potential stems from the simple fact that it is a leading local company in China in high-priority technology fields. As a result, it will likely enjoy significant support from the Chinese government so that it can serve as a vehicle whereby China can advance its goals towards becoming the pre-eminent global technological superpower.\nThis principle has already played out several times to NIO's benefit.\nFor example, the government recently gave NIO a RMB7 billion (US$1b) bailout to give it the cash it needed to sustain and scale operations.\nAdditionally, government-owned auto manufacturer - Anhui Jianghuai Automobile Group Corp - has also assisted NIO by providing it with manufacturing services, enabling it to scale with minimal additional capital investment.\nPerhaps the most glaring example of this was how the Chinese state media recently successfully harmed the reputation of TSLA - NIO's top foreign rival - to the point where the Elon Musk-led company had to issue an apology.\nFurthermore, the Chinese government is making a major push to transition the automotive market towards electric vehicles in an effort to battle its huge pollution problem. It is achieving these aims by offering purchase rebates and tax exemptions for the industry, while also placing restrictions on new gasoline and diesel powered vehicle permits.\n#4. Global Expansion\nNIO is also poised to begin expanding its sales into global markets, beginning with Norway. Not only will the company be selling its cars there, but it will be building out local physical and digital infrastructure to create a high quality user-friendly ecosystem to add value to its brand and bolster its competitive positioning. Once it has built significant scale in Norway, it will then have a greater position of strength from which to infiltrate the rest of the European market. Given the geopolitical tensions with the United States at the moment as well as Tesla's dominance in the U.S. electric vehicle market, Europe seems like a much more logical choice to begin global expansion.\n#5. Crunching The Numbers\nElectric Vehicle sales are already growing exponentially - especially in China - and we expect that number to explode much higher in the years to come.\n\nIn fact, while just barely over 1.2 million electric vehicles were sold worldwide in 2017,Bloomberg New Energy Finance expects that number to soar to 60 million by 2040. Not only that, but battery and battery charging infrastructure demand will soar as well.\nIf NIO can seize on its early leadership in China in both the electric vehicle and battery charging infrastructure businesses and also successfully scale its business internationally, there is certainly room for it to achieve a $1 trillion valuation by 2040. For example, its gross margin is expected to be nearly 20% in 2021 and 2022. TSLA's gross, meanwhile, is around 23% and its net margin is roughly half of that, or ~11.5%.\nNIO's BaaS business should also be higher margin given that it could be entirely automated and the actual real estate could be leased instead of owned in order to free up capital for higher return investment elsewhere. With continued scaling in both businesses and overall positive trends in the business with reduced costs across the board through automation and enhanced data analytics, we think gross margins of 25% and net margins of 15% by 2040 are entirely feasible.\nIf NIO were to grab just 7.5% of the global EV market (TSLA's is currently 11%) by 2040, it would be selling ~4.5 million cars per year. We think this share is actually very feasible when you consider that the majority of electric vehicle sales are expected to be in China and that NIO has an inside track on that market given the support it is receiving from the government.\nIf the average sale were for $40,000 per electric vehicle, its profit would be ~$6,000 per vehicle, translating to $27 billion in annual profit from auto sales alone. At a 30x price-to-earnings multiple, that would put the automotive business at a $810 billion valuation.\nMeanwhile, its BaaS business could likely generate $150 in profits per year per vehicle in its sphere in China. By 2030,it is estimated that there will be 50 million electric vehicles on the road in China and that EVs will account for 40% of total auto sales. A very conservative estimate is that the number of EVs on the road in China will double to 100 million by 2040. If NIO's BaaS business serves 20% of the electric vehicles in China by 2040, that would equate to an additional $3+ billion in annual net income. Once again applying a 30x price-to-earnings multiple, that would equate to roughly another $100 billion in market valuation.\nMeanwhile, the potential for using its data and autonomous vehicle technology as well as vast BaaS infrastructure to launch an autonomous taxi business network is also immense. While it is hard to know exactly what sort of value this would command as it is hard to project how it would be regulated by the Chinese government and how well consumers would adopt it, it is not a stretch that NIO's scale and capabilities by this point in such a potentially massive market as is offered in China would put the valuation for this business at $100 billion.\nCombining all three businesses gets us to a $1 trillion total valuation under a bullish, but not entirely implausible scenario.\nRisk Analysis\nWhile the path to $1 trillion certainly looks viable, there are numerous risks to consider along the way.\nFirst and foremost, NIO faces a lot of competition from both foreign and domestic companies. TSLA has a large presence in China and overseas and sports a premium brand to go along with an extremely driven and innovative CEO and engineering team. While the Chinese government has helped NIO some already with surviving the TSLA threat, it is unknown the depths that it will have to and be willing to go to continue giving NIO a boost to sustain its competitive standing in its domestic market.\nOf course, NIO also faces competitive pressures from fellow Chinese electric vehicle manufacturers including Baidu(NASDAQ:BIDU), which already has a partnership with a government-owned automaker (BAIC Group) to put 1,000 driverless cars on the roads over the next 3 years as a prelude to establishing an autonomous taxi service in China. Facing off against fellow major domestic players who also have government backing poses another threat to NIO because it means that it cannot solely rely on government assistance to survive and thrive.\nOn that same note, it also increases the political risk for NIO. Given that it is not the only horse that China is betting on in the mobility space, if their leadership were to run afoul of the Chinese Communist Party and/or they were to simply lag behind in performance, they could quickly be \"dropped\" by the government and the business could fall into a downward spiral. If Alibaba(NYSE:BABA) could face this, NIO certainly could too. If nothing else, the Chinese government could easily seize some or all of NIO's physical or intellectual property for state use, depriving NIO shareholders of much of their equity value.\nFurthermore, expanding overseas could also be complicated by the fact that China is currently dealing with growing geopolitical tensions with other Asia-Pacific nations, Europe, and the United States. As a result, trade barriers may go up, especially in such high-priority technologies as mobility and autonomous technology. The U.S., Europe, Japan, Korea, and even India have well-established automobile industries and if they feel threatened by a Chinese competitor, they may well decide to throw up barriers to entry in their markets.\nOf course, as the China hustle pointed out, many Chinese companies have a troubling track record of fudging accounting numbers. As a result, investors should always view Chinese company - to include NIO's - financial numbers with a healthy dose of skepticism. While it is very possible - if not likely - that NIO's numbers are completely accurate, it is still a risk that needs to be considered.\nLast, but not least, NIO is currently priced quite expensively as it is still running up massive losses and trades at 71 times expected 2021 gross income. Therefore, the range of potential future outcomes is quite wide and investors could very well be dramatically overpaying by purchasing at today's prices. It should be viewed as a highly speculative investment accordingly.\nInvestor Takeaway\nNIO is currently struggling to turn a profit and has had to be bailed out by the Chinese government. At the same time, its valuation is sky-high. While this might steer many investors away and the stock is indeed a very speculative investment, there is also a plausible path for the company to become a $1 trillion mega cap by 2040 and generate attractive long-term returns for investors as a result.\nWhile not for the faint of heart and certainly not without risks, NIO could continue on its path towards becoming one of the world's pre-eminent mobility companies.","news_type":1},"isVote":1,"tweetType":1,"viewCount":293,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
