Nio Inc (NIO)

[BottomBounce]

$NIO The BULL thesis, or why I believe Nio investors are set up for explosive growth in the near future.

Technology: In 5 years Nio has been approved 882 patents with an additional 1989 pending demonstrating technological prowess in the BEV sphere. Among those patents are capabilities for high voltage (800V) vehicle charging, a distributed speaker system, and battery cooling for fast charging. While it’s unclear how many of these patents will be used in the near term, it’s obvious that Nio has big plans for their next gen vehicles in the long term. Speaking of next gen, the ET7 is supposed to be the crown jewel of Nio’s technological innovation. It is reportedly capable of L4 autonomous driving, and if released according to schedule it will be the first in China.

Partnerships: Nio has been leveraging partnerships extensively in its business which has helped integrate the newest technology into their vehicles faster. Partnerships include PLG for creating solid-state batteries, Baidu for user software such as Baidu maps, Mobileye, NVIDUA and NXP for autonomy, Bosch for EV Technology, Tata Technologies for engineering, BASF for ES8 coatings, GAC for lower end BEV’s, Razer for a special edition ES6…the list goes on and on. All of these partnerships give Nio a competitive edge over others.

Customer Service: Nio’s approach to customer experience is what I consider their greatest strength next to their vehicle designs. Nio is the only EV company in China where customers can request a charge, or swap for their dead battery from an app. Additionally, through the app which has over 800,000 users, customers can request maintenance or even post in the community portal about their experience. That’s right, the app also functions as a social network in addition to customer assistance for things like a dead battery. In a sort of home-grown marketing approach, Nio users can receive credit towards the Nio houses by promoting Nio to others. Only time will tell how customers feel about their cars, but Nio has certainly shown to customers and investors that they are very concerned with how customers react to their vehicles which is important for a company trying to establish themselves as a luxury brand.

Market share: Nio started selling cars in July, 2018 and since then has delivered over 20,000 cars. This may not seem like a lot but if you do the math we can estimate Nio has between 2-5% market share for EV’s. Considering the growth we predict for EV’s in China and the rest of the world this is huge! This means that consumers are appreciably adopting Nio’s brand and technology. Every Nio car on the road is also an advertisement. Personally, I’m looking forward to Tesla/Nio competition in 2020.

For my contrarian investors out there remember the great words of Warren Buffet: “Be fearful when others are greedy and greedy when others are fearful.” The fear mongering we’ve seen today and last week only makes me more confident about my investment. Long and strong, GLTA.