On December 23rd, Nio Inc.(NYSE: NIO) held its 2023 Nio Day event in the Chinese city of Xi’an, the birthplace of the ancient Silk Road, a trade route that linked the Western world with the Middle East and Asia. Clearly, Nio wanted to emphasize how it plans to connect cities in China through its chargers and power swap stations, just like how the Silk Road connected the world.
More than 10,000 people attended the Nio Day event at Xi’an Olympic Sports Center Stadium. The automaker chose “A New Journey” as its theme – fitting considering the incredible plans NIO has for its future. In this article we’ll unpack all the key highlights from the event, and what it might mean for NIO stock once markets open back up on Tuesday and the NIO stock forecast for 2024.
Nio’s Accomplishments in 2023
William Li, Nio’s CEO and founder, got the show started by revealing that Nio owners in China have driven a total of 15.3 billion kilometers thanks to Nio’s chargeable, swappable, and upgradable service solutions. In terms of public charging networks, Nio has become the EV company with the most chargers in China, with 20,855 spread across the country in 307 cities.
Li also celebrated Nio’s remarkable accomplishment of completing over 1,000 power swap stations in 2023 – a goal the company had set just earlier this year. Now it has over 2,309 power swap stations.
Expanding its Power Swap Network
Nio clearly plans on building upon its success with the power swap network by expanding the area covered and number of stations, allowing for faster swaps, a power swap pilot for highways, automatic parking in one go, and power keep that will allow for a full charge in just three minutes.
In 2024, Nio plans to reach a total of 3,310 stations across China along with 20,000 more public chargers, for a total of 41,000 public chargers in China.
Power Swap 4.0 Station
Of course Nio is also planning to introduce a brand new Power Swap 4.0 Station in April 2024, capable of storing up to 23 batteries, with a service capacity of up to 480 swaps per day. It’ll also reduce the time it takes to swap a battery by 22% and solar panels on its roof will save up to around 18,000 kWh of electricity per year.
The new station will also be smarter. Powered by 4 automotive-grade AI Nvidia Orin X chips and 6 ultra-wide FOV LiDARs, it will have a total computing power of 1,016TOPS so that it can monitor its surrounding environment and precisely communicate with vehicles.
As cool as the battery swap station is, it’s important to look at its impact on drivers and needless to say it has really transformed their approach to driving. Every Nio vehicle owner can upgrade their battery and Nio has already provided more than 160,000 battery upgrades. This flexibility has led to a huge change in the ratio of users with standard range batteries to users with long range batteries. In 2021 it used to be 50:50, but it changed completely in 2023 to 95:5.
Li attributed this to users preferring to use standard range batteries for their daily activities, while renting the longer range batteries for long trips. This change in consumer behavior also highlights a real opportunity for NIO to capitalize on well into the future.
Nio’s New Battery
Li also took this opportunity to mention his livestream test of the new 150kWh battery, a global first that allowed him to drive 650 miles with 3% battery capacity remaining. This powerful new battery will be available soon and even older Nio models can use it.
NIO Stock 2024 Catalysts
In its Nio Day 2023 presentation, NIO announced a lot of catalysts for 2024 whether it was the new power swap stations or a more powerful battery. But the company has a few more catalysts up its sleeve.
Power Charger 4.0
One of which is its new Power Charger 4.0 boasting a 640kW peak charging power, 765A maximum current, a maximum voltage of 1,000 volts, and the lightest liquid cooled cable in the industry. At 2.4 kilograms, it’s as light as a laptop if you can believe it. This new product will also launch in April 2024 so we can expect to see revenue from some of these products reflected in its Q3 and Q4 earnings.
As exciting and potentially lucrative as these other advancements may be, the belle of the Nio Day 2023 ball was clearly the NIO ET9.
NIO ET9
This luxury vehicle is very spacious with the largest in-class 23-inch wheels to elevate its presence even more. It has a 0.2 meter ground clearance giving its drivers a higher stance and a commanding view. If its height is too much, it can even be lowered by 0.05 meters in just one second, for an easier entry and exit. With best in-class 0.22 suspension travel, it can also absorb shocks and vibrations easily.
Its body is made of high-strength aluminum steel, magnesium and composite materials and its smart restraint system can precisely detect different collisions and the bodies of the car’s occupants. This coupled with automatic airbag inflators and seat belt adjustments makes it a very safe vehicle.
Beyond that, the ET9’s intelligent lighting system comes with four different safety standards, and reduces risks of accidents by enabling interactions with other road users. Its braking system can also take control at any time and make sure that the car pulls over safely. With an evolving Watchtower sensor layout and wide-angle side LiDARs, it is equipped for both autonomous and assisted driving.
NIO ET9 Interior
As impressive as this car may be, if Nio does try to market it outside of China it may have issues translating to the European market given its size and limited seating. However, the car’s interior illustrates that Nio is clearly targeting the luxury market.
The bridge connecting the back to front of the vehicle has a mini fridge drawer with a 10 liter capacity which opens with just one touch. The second row even has a fold-out table with a 360 degree range, allowing occupants to use the table for anything.
The seats themselves can be set to lounge mode with one tap, offering a range of adjustments. Besides this, there are 14.5-inch screens which automatically adapt to the position of the seat, giving users the best view from any angle. To cut out the glare from the sun, there are even 7 electric sun shades.
NIO ET9 Battery
Of course, what really matters is what’s under the hood so to speak. As for the battery, it allows up to 600kW fast charging, achieving 158 miles of range in just 5 minutes. The NIO ET9 is already available for preorders in China, at a starting price of around $113,000, but deliveries won’t begin until the first quarter of 2025.
Nio has tried to stay out of the cost cutting battle in the Chinese EV market, but with this price tag it is clear that the ET9 will not be competing with EV rivals for economically minded consumers.
Nio’s In-House Chip
One really exciting thing to come out of the ET9 is the debut of Nio’s first in-house developed intelligent driving chip.
The goal of the NX9031 chip is to deliver the same performance as the industry’s 4 leading chips with its 5 nanometer automotive-grade process and over 50 billion transistors. It has a 32-core CPU, with 615 thousand DMIPS, able to run over 6 trillion commands every second. This is an incredible 2.5 times better than an industry leading processor. Additionally, the in-house developed NPU can run various AI algorithms flexibly and efficiently, outperforming many of the mainstream AD algorithms.
Technical Analysis
Since the Nio Day event took place on Saturday and the market has been closed for Christmas, there hasn’t been a reaction to any of the news yet. Looking at the hourly time frame NIO stock appears to be trading in a sideways channel after testing a strong support at $7.20 multiple times. NIO stock is currently trading above the 200, 50, and 21 MAs after rising 11% on news that the Emirati firm CYVN Holdings was buying $2.2 billion worth of Nio stock. This triggered a test of the $8.79 resistance but it pulled back and tested the 50 MA after that.
Based on momentum from the NIO investor day presentation, I’m expecting a retest of the resistance. Investors could go long, with a stoploss at the 21 MA and a take profit at the $8.79 resistance for an R:R of 2.4. More risk-tolerant investors can sell some of their position at the resistance and leave a tail in case it breaks through the resistance.
But looking at Nio’s long-term potential and particularly the NIO stock forecast for 2024 gives a slightly different picture.
Nio Stock Forecast 2024
Nio is currently operating at a loss, with its losses in Q3 reaching $624.6 million. This was a 10.8% increase from the previous year as a result of declining margins thanks to the EV price war Tesla started. As is, the company isn’t expected to turn profitable anytime soon.
However, that’s not to say that Nio does not have potential to improve significantly. Its revenue is forecast to grow 26.5% and based on its forward P/S its still fairly valued compared to some of its peers.
NIO’s strong charger presence in China could also differentiate it from competitors especially as it continues to develop its battery swapping technology. Besides this, Nio continually drives innovation in battery technology, producing the 150-kWH semi-solid-state battery. Not to mention it produced its own chip technology, which has computing power comparable to four Nvidia Drive Orin X chips, according to Li.
The state-backed Emirati firm CYVN Holdings has seen this progress and decided to invest $2.2 billion in Nio, bringing its share in the company to 20%. With two seats on Nio’s Board of Directors, it’ll be interesting to see how this influence will shape Nio’s performance in 2024.
This relationship could also provide an opportunity for Nio to market its new luxury vehicle in the UAE, a market known for its love of luxury products and ability to afford them. It would also complement Nio’s plans to take its affordable sub-brands, Firefly and Alps, to the European mass market in the next two years.
While the new financial injection from CYVN represents a significant vote of confidence from a foreign institutional investor, it also shows Nio’s increasing losses have made the company desperate for outside funding.
Overall, risk-tolerant investors looking to get in on China’s large and growing EV market, which has an expected revenue of $292.1 billion this year, could find NIO stock a good value opportunity at this price. For current investors in NIO stock, this Nio Day event has outined a number of catalysts for 2024 which have helped improve the EV makers outlook for the year.
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