This week let’s welcome 33 new members to join us on board to grow together with NIO! If you’re reading this but haven’t subscribed, we invite you to join the 1,533 NIOtime community by subscribing here!
Dear NIOtime gang,
“Always Forward ”
We watched through the live stream from the NIO official account and in general, we are feeling good about NIO’s future plans and promises. A lot of NIO friends may comment that this is rather a product pitch than a real product showcase in the near term. We agree with this fact, however, the car industry isn’t the same as the phone industry that can manufacture quickly on a large scale because the price of a phone is relatively smaller than that of a car. The manufacturing supply chain and consumer behavior for both products are totally different.
To us, the long term visions and clear execution plans are critical for a company to convey to its investors as well as potential users. At least, there is a clear dateline for each presented technology like 2nd generation Power Swap (1H 2021), ET7 mass delivery time (Q1 2022), and 150 kWh battery (Q4 2022). In case you miss the NIO day 2021 live stream, we will go over the highlights in this issue and provide our thoughts on why we wouldn’t sell any single NIO shares.
Technical Chart
This week NIO closed the week at $58.92 which is about 20% higher than last week’s closing price ($48.74). Last week we noticed that BB band was narrowing and anticipated a breakout to either trends. This week we observed a breakout above $50 price level, hit its previous high price and managed to close the week above previous 52W high price. Bravo again for those investors who hold through this level.
This week NIO day was over and let’s see how Wall Street likes the pitched products offered by NIO today. In the past trend, we usually see NIO would sell the news where short term traders are taking profit. Now NIO is gapping up on Friday and the gap zone is the current support level. If NIO can cover the gap and bounce back, that would be a bullish signal from the street in near term. Otherwise, the EMA21 ($49.17) and EMA8 ($52.54) and these two price levels can serve as short term retracement zone for NIO.
Next few weeks we would anticiapte some rating updates from Wall Street analysts and the stock is likely to respond to these reports.
This Week’s Top 7 Highlights by @theNIOtime
ET7 First Sedan Model
150 kWh Battery
2nd Generation Power Swap
NIO Autonomous Driving (NAD)
NIO Blue Point & NIO Blue Sky Lab
NIO Power Update
NIO House & Space Update
News
ET7 First Sedan Model
In brief, ET7 is the NIO first sedan car model that runs farther, faster, smarter and safer for being a new model designed for tomorrow - smart tech autonomous driving electric car.
NIO ET7 is designed for tomorrow and the car design is focused on the following features.
Exterior
Space
Digital Cockpit
Performance
For the exterior, ET7 is designed for AD, outclassing dimensions, soft-closing door with frameless window, flush door handle, all-glass roof, and heartbeat taillight with options to upgrade to the sporty color caliper and moon theme exterior set.
For inner space specification, ET7 is designed for a second mobile living space which has Karuun renewable rattan, microfiber headliner, front & rear invisible air vents, waterfall ambient lighting, smart fragrance & air quality system, seat heating, ventilation, and massage with the option to upgrade to Nappa interior.
ET7 is designed with a Digital Cockpit concept in mind that has UWB digital key, 10.2” HDR instrument cluster, 12.8” AMOLED center display, enhanced HUD, all smart cockpit domain controller, NOMI AI companion, 5G connectivity, and 7.1.4 immersive sound system (23 speakers).
In regards to car performance, ET7 achieves Cd of 0.23, 1,000 km+ NEDC range, 180kW PM motor with SiC, 300kW induction motor, 3.9s acceleration, 33.5m braking distance, smart air suspension, and CN & EU 5-Star Standards.
In our humble opinions, the new ET7 model unlocks new EV market opportunities for untapped users who prefer sedan over SUV and helps NIO expanding their total addressible market (TAM) in general automotive market. As mentioned by Li Bin and Lihong Qin, ET7 is competing with BMW series 7, a premium brand Sedan.
That’s why we see the unit price is high for ET7. This is generally a good news, meaning given constraint production capacity at the moment, NIO wants to ensure their ASP is higher and sustainable. This is totally reasonable, let’s not forget NIO first position themselves as premium EV brand. Furthermore, giving users more choice of premium sedan, we believe this will further increase the market share of NIO.
Does this execution plan sound similar? This is what exactly Elon Musk laid out the master plan here for Tesla - selling premium car at the beginning, slowly entering affordable, medium volume car and now executing step 3 in the plan.
Create a low volume car, which would necessarily be expensive
Use that money to develop a medium volume car at a lower price
Use that money to create an affordable, high volume car
So we think NIO is following the same master plan which works for Tesla, but with unique value proposition building around “chargeable, swappable, upgradable” core ideas. In near future, our prediction for NIO’s next model would be also a sedan model but targeting a medium volume car at a lower price than ET7. This is likely under development and to be debut on next NIO day.
150 kWh Battery
As rumored before on the media, the150 kWh battery is finally debuted on the NIO day with more details. In fact, the battery capacity has been improved by 20% year by year. The 150 kWh battery with 360wh/kg energy density is adopted using solid-state battery technology through advanced material and process innovations.
In-situ solidification hybrid electrolyte
Inorganic pre-lithium Si/C composite anode
Nano-coating nickel-ultra rich cathode
The announced delivery schedule for the 150 kWh is from Q4 2022. The expected NEDC driving ranges would be greatly improved across all current NIO car models once NIO users upgrade to this battery option as shown in the image below.
NIO is bold and clear about the delivery term for 150 kWh and they are not worrying that potential NIO users would wait for newest technology offering. This is because their unique product proposition which is upgradeable enabling them to let potential NIO users to lock in the current car model with the option to enjoy the newest technological benefits. This is not the case for other EV brands.
Many other investors may argue that this is an negliglible consideration when buying cars. However, we don’t agree as purchasing a car is not like buying a phone which you can switch at a relative lower opportunity cost. Do you still remember your last car buying experience and process? And how long would you stick to your car once you own the car? The car buying decision usually lasts for few years or some even longer for a decade. You would compare and want the best specifications and features out of the market according to your budget.
If this proposed solid state battery is delivered as promised, this would put NIO competitive in term of NEDC driving range with the battery technology mentioned by Tesla in Battery Day about the same timeframe.
2nd Generation Power Swap
As expected, NIO unveiled its second-generation battery swap station at the NIO Day 2020. Li Bin claimed that it triples its current service capacity,loads up to 13 batteries, and can provide up to 312 services in a single day with a promised goal of a total of 500 Power Swap build in 2021.
In the first generation of power swap stations, the official time of power change is 3-5 minutes, however, in the second generation of power swap stations, the capacity of power swap will also be increased to three times of the original, and the time will be further shortened.
The second-generation power swap station is unmanned, and the station uses SAP's flexible plus unlocking platform, which allows users to automatically swap the power directly in the car with one key. The system can also self-test the battery, motor, and electronic control system while the power is being swapped.
In our new year resolution for NIO, one of our predictions for NIO Power came true with the latest annoucement during the NIO day. If you have missed that issue, you may read it here. There are 177 Power Swap station as dated of today. We are 323 NIO Power Swap away from 500 Power Swap. We expect NIO would speed up even more once the second generation Power Swap is officially deployed.
Why second generation power swap matter? Right now a lot of NIO users have complaint about the waiting time in the queue given limited station and battery availability as well as longer operation time. Therefore, we think that NIO is taking users’ concerns seriously and prioritizing the importance of NIO Power infrastructure which is critical for increasing the buying confidence among potential NIO users. With more efficient Power Swap stations around the country, the more potential NIO users buying into NIO ecosystem.
NIO Autonomous Driving (NAD)
In addition to the eye-catching exterior design, the new NIO Autonomous Driving (NAD) technology is a key focus of this new all-electric vehicle from NIO. The NIO ET7 is equipped with NAD which features the NIO AQUILA Super Sensing system with ultra-long-range, high-precision LiDAR. ET7 is the first model in the world to feature an 8-megapixel self-driving HD camera, giving the vehicle a significant increase in image data collection capability compared to the 1.2-megapixel of its competitors.
In addition, NAD also comes with the most powerful mass-produced mobile computing platform to date, the NIO ADAM Supercomputing Platform, with 33 pieces of high-performance sensing hardware across the vehicle. NIO ADAM allows NIO's vehicles to achieve full coverage of high-speed, urban, parking, and battery swap scenarios, bringing a point-to-point autonomous driving experience.
NIO has demonstrated NAD full-stack autonomous driving technology capability through comprehensive in-house R&D from perception algorithm to map positioning, from control strategy to underlying system.
Li Bin emphasized earlier the usage of Lidar + HD camera for ensuring the safety aspect of NAD. The proposed NAD sensing system now has the ability of best view position + super wide view angle + super high resolution + super long detection distance. In addition, the NIO Adam supercomputing platform has a total computing power of 1016 TOPS, more than the combined computing power of 7 Tesla FSDs. It is also worth mentioning that the new car's intelligent body control system can integrate big data and high precision maps for self-learning to provide a comfortable driving experience according to users’ driving behavior.
A few comments on the position of Lidar and HD camera on front end of the vehicle, this might affect NIO car aesthetically, however, we think this is smart design by NIO to achieve futuristic concept for leading EV fashion and optical sensor location for extra safety.
We didn’t see NIO mentioning autonmous driving partnership with Mobileye instead using NVIDIA chipsets in their upcoming models. This is likely that Mobileye partnership might be limited to previous models which has equipped with Mobileye chipset. In our opinions, this doesn’t affect NIO’s initial partnership plan entering autonomus robotaxis market with the help of Mobileye.
What surprises to us is that NIO launched monthly subscription based NAD model instead one lump sum as offered by Tesla. This is smart way to increase the take rate for monthly NAD subsription model as paying a lump sum upfront without using the product ready first would make users hesistate about the NAD opt-in possibility.
NIO Blue Point & NIO Blue Sky Lab
Another two overlooking product launches among the media are NIO Blue Point and NIO Blue Sky Lab. We would cover briefly here until we get more official details from NIO. From what we understand from Li Bin, NIO Blue Point is a program for allowing NIO users to transact carbon credits with local authorities in exchange for NIO points as a reward.
NIO Blue Sky Lab is another program under NIO life that aims to design environmentally friendly and stylish products using wasted material left during the production.
In the past, the EV makers can redeem carbon regulartory credits by selling these credits to the ICE makers as the policy is incentizing more EV vehicles on the road and punishing ICE vehicles that produces carbon footprint to the earth. With no much details, we guess NIO may pass partial carbon credits to NIO users as an incentive to contribute to the clean environment in exchange with NIO points to be used on NIO app for any transactions related to NIO.
NIO Blue Sky Lab is another move by NIO to demonstrate how they is firm with their vision to create a blue sky coming in China as the air pollution in China has been bothering since the past few decades due to rapid rising of China’s industrialization and globalization efforts. This is a very first motive of Li Bin who eagerly started a national EV brand that can achieve this mission - a blue sky for our future generations.
NIO Power Update: 175-177th Power Swap
So far NIO has three new Power Swap stations and six new Power Charger stations, which sums up to 177 power swap stations and 100 power charger stations in China. (News Source: NIO App)
NIO House and Space Update: 206th-217th NIO Space
On the first day of 2021, NIO announced 11 new NIO spaces were launched. For more photos, please kindly refer to our NIOtime Facebook photo albums here. (News Source: NIO App)
Summary
“Ready for Tomorrow”
Although NIO day 2020 was over, NIO’s long journey is just begun. 2021 will be a challenging year for NIO to keep its promises on users’ expectations of the user-enterprise including NIO's second-generation Power Swap launching and global market expansion.
Even though there are some voices out there this week quoting battery swapping technology is a dumb idea, please don’t freak out as some are not doing DD deep enough for understanding the entire business model of NIO which is clearly different than the pioneer EV brand.
So our new year advice to our fellow long-term NIO investors is “Don’t sell a single share of NIO”. NIO's stock could be worth more than three times its current valuation, which eventually becoming the second-largest automotive brand.
We will periodically post quick updates on our NIOtime Instagram, NIOtime Twitter, and NIOtime Facebook. Please follow us on social media to interact with us and let us know your thoughts and suggestions.
I'm definitely long on NIO and looking forward to passing some shares to my grandchildren.