Shareholders of NIO have many reasons to celebrate the new year 2021. As of January 3, 2021, the company has released impressive new information. In December, NIO delivered 7,007 vehicles, representing 121% increase as compared to December 2019. The total number of cars delivered by NIO is equal to 75,6411. The information is obviously better than expected. As a result, most analysts would be expecting the share price to increase in 2021.
Reaction Of The CEO
The year 2020 was a difficult year for many corporations. NIO was not different. Given the COVID19 situation and the lack of the vaccine, most analysts were expecting NIO’s business to decline. That makes the new figures delivered more valuable. Read the reaction of the CEO William Bin Li:
2020 has been a challenging year for the whole world. Against this backdrop, NIO has achieved consecutive record-highs along the way, and closed the year on a high note with a remarkable December deliveries of over 7,000 vehicles. Source: William Bin Li, founder, chairman, and chief executive officer of NIO.
These results are attributable to the growing recognition of our premium brand, the competitive and compelling products and services, the expanding sales network, and most importantly, the continuous support from our passionate and loyal user community. The innovative Battery as a Service (BaaS) model has shown popularity among our users since its launch. With the 100kWh battery pack offered as an option, the penetration of BaaS has reached over 40% among new orders in December, demonstrating its competitiveness and acceptance by our users. Source: William Bin Li, founder, chairman, and chief executive officer of NIO.
Market Analysts Will Most Likely Increase Their Target Prices
In my opinion, most analysts did not have enough time to assess the new figures. That makes traders advantageous over other market participants. The numbers were better than expected. It means that analysts may increase the number of vehicles to be delivered in 2021. As a result, 2021 sales may be better than expected, and the total valuation of the company will most likely increase.
Notice that in a previous article, we expected NIO to deliver 50k vehicles in 2020. We were not totally wrong. In 2020, the company reported a total of 43,728 cars. With that, let’s focus on our numbers for 2021. We said that NIO would deliver close to 90k vehicles in 2021. This number may not be valid any more. 90k deliveries would represent an increase of 109% year on year. In December, NIO delivered sales growth of 121%. Hence, I believe that the NIO could deliver more than 90k vehicles in 2021. Taking into account 7,007 cars delivered in December 2020 and 120% increase, NIO will most likely deliver more than 106k vehicles in 2021.
Tesla Decreased Its Prices In China
Many NIO traders disliked that in January 2021, Tesla decided to set its prices a bit below competitors. Most traders in the market were expecting Tesla to act like this. Tesla is producing many more models, so it can actually reduce its prices, and still make a significant amount of sales.
Source: Bloomberg
I don’t like that Tesla is already reducing its prices in China. However, I don’t clearly see why that would make NIO’s sales decrease. NIO does not produce a significant amount of vehicles. The company is still developing its factories. That makes each NIO vehicle more exclusive. The amount of NIO cars in the street is quite limited. As a result, I believe that NIO will be able to sell its cars a bit more expensive than Tesla.
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Disclosure: We Don’t Hold TSLA, NIO shares
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