The ES6 is one of NIO’s electric sport utility vehicles.
Sean Gallup/Getty ImagesA big day for Chinese electric vehicle maker NIO is approaching. The company is launching a new sedan on Jan. 9, and investors and car buyers will be watching.
Here’s what to expect Saturday, along with some recent history.
- This is NIO’s (ticker: NIO) fourth NIO Day. This time the car maker is planning to launch a new sedan, and to discuss autonomous driving and other technologies.
- NIO peer XPeng (XPEV) held a similar event on a Saturday in October to review its autonomous driving technology. XPeng also recently partnered with a lidar—short for laser-based radar—company. Lidar sensors help cars identify objects.
- Deutsche Bank analyst Edison Yu wrote in a recent note that NIO’s autonomous-driving technology will likely include lidar sensors, along with internally developed software. Advanced safety features, like driver assistance software, are becoming an important facet of competition for the industry. All car companies—EV makers and gasoline engine-based manufacturers alike—are investing in self-driving technology.
- Yu also predicted that the new car will be a mid-to-full-size sedan in the premium segment of the market, and that it could enter production as soon as late 2021.
- Mid- to full-size premium electric cars are probably most comparable to a Tesla (TSLA) Model S. NIO’s three current models are SUVs.
- Yu also forecasted that NIO will talk about new battery swapping technology. To solve the problem of lengthy EV charge times, NIO swaps out the entire battery pack so drivers can get back on the road with a full charge in minutes.
Yu rates NIO stock at Buy, but he has a $50 price target for shares, about 6% below Tuesday’s closing price of $53.20. Most analysts like NIO stock. In fact, about 65% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the Dow Jones Industrial Average is about 57%. The average analyst’s price target is about $48, a little below Yu’s.
Compared to analysts’ ratings, Barron’s qualifies as an outlier on NIO, and recently wrote that shares were too expensive, recommending investors take some profits. That was only in mid-December. Since then the company has announced strong deliveries and Saturday’s event. Even with the recent good news, the stock is still expensive. Shares trade for about 15 times estimated 2021 sales.
NIO stock rose more than 1,100% in 2020. And in the first trading days of 2021, shares have gained another 9%, outperforming the S&P 500’s roughly 0.8% decline.
Write to Al Root at allen.root@dowjones.com
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January 06, 2021 at 07:30PM
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NIO Is Launching a New Car. Here’s What You Need To Know. - Barron's
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