A NIO es6 car
Wang Zhao/AFP via Getty Images
Chinese electric vehicle maker NIO unveiled its new all-electric sedan Saturday at its fourth annual NIO Day. It was quite an event complete with laser light and pop singers. For investors, NIO Day offered rich detail about a new car, autonomous driving, pricing models and EV batteries.
The NIO (ticker: NIO) sedan, dubbed the ET7, is about the size of a Tesla (TSLA) Model S and boosts impressive features such as soft-closing doors, air filtration and acoustic glass for a quiet ride.
Those are mainly aesthetic considerations. The car also boasts about up to 625 miles of range, with the most advanced battery options, 625 horsepower and air suspension—the kind car buyers might find on a Porsche.
An ET7 will cost drivers about $84,000. It’s a luxury sedan.
In addition to the car, NIO also unveiled a higher-capacity battery, new swapping stations with more daily capacity. NIO is building out a battery-swapping network. NIO, throughout its history, has endeavored to solve EV problem such as range anxiety and charge time by swapping out the entire battery back. Swapping a battery for a NIO drive is a little like filling up a traditional car at a gas station. NIO has completed about 1.5 million battery swaps over its history.
NIO also reviewed its self-driving technology. NIO’s autonomous driving solutions include ultrahigh resolution optical cameras and radar as well as lidar, short for laser based radar, sensors. Those are technologies used by other auto makers.
NIO autonomous driving sensor and software suite is called Aquila. NIO’s computing platform crunching all that sensor data is called Adam. The platform is powered by Nvidia (NVDA) microprocessors. About 6% of Nvidia sales are generated in the auto space, according to its fiscal year 2020 numbers, which ended in January 2020.
NIO plans to offer it’s self driving solution as a subscription. That’s something even Tesla hasn’t tried yet and highlights how new EV makers, such as NIO, are trying to use software-like solutions to generate recurring revenues.
The autonomous driving talk also offered some additional details about sensors regarding field of view and range. NIO sensors can see up to 500 meters down the road with a 120 degree field of view.
NIO talked batteries too, but details were thin. NIO mentioned solid state batteries, the kind QuantumScape (QS) is pioneering, in its presentation, along with new battery chemistries and anode technology. For investors, the message is that all EV companies, including NIO, are investing heavily in improving battery range, cost and reliability.
It was an impressive event. Still, Barron’s recently wrote that NIO was too expensive for us at about 15 times estimated 2021 sales. Since that article appeared less than a month ago, NIO stock is has rallied more than 40%, crushing comparable returns of the S&P 500 and Dow Jones Industrial Average. Investors are very excited about EV technology and it didn’t take long for our call to sour. But NIO is still pricey. Now NIO is trading for almost 19 times estimated 2021 sales.
Tesla stock, the most valuable EV company and car company in the world, is now trading for 18 times estimated 2021 sales. Its stock is also up more than 40% over the same span.
Tesla is more valuable than NIO, but few other auto makers are: NIO is the fourth-most valuable auto maker on the planet and rapidly approaching the value of number three: Volkswagen (VOW.Germany).
Write to Al Root at [email protected]
