patrick_y
[PuristSPro Moderator]
28307
NIO: Chinese Electric Car Company Stock IPO on New York Stock Exchange
Special Car News: IPO of a new Chinese Car Manufacturer; NIO. Moderator Patrick_y, a Silicon Valley resident and a fan of high performance cars from Lamborghini to green electric vehicles like Tesla discusses his thoughts about the exciting company NIO. 
(Caption: NIO EP9 sports car (pictured above)
achieved a 6 minute 45.9 second Nurburgring North Loop lap record! It bests the Porsche 911 GT2 RS, Lamborghini
Aventador, Lamborghini Huracan Performante, Ferrari LaFerrari, Porsche 918, and McLaren P1 and is generally the best
among any "road legal intentioned" vehicle.
As a supporter and enthusiast of electric car technology and a business analyst in real life, I wanted to share with you some interesting facts about NIO. These facts are divided into two groups; strengths for NIO and weaknesses for NIO.
Strengths:
1. NIO has big investors; Baidu and Tencent among them.
2. Product is compelling; the ES8 SUV is a modern SUV with great interior design and finish.
3. NIO also has some great technology; its EP9 sports car (pictured above) achieved a 6 minute 45.9 second Nurburgring North Loop lap record! Very impressive. Better than the current Porsche 911 GT2 RS, Lamborghini Aventador, Lamborghini Huracan Performante, and is generally the best among any "road legal intentioned" vehicle.
4. Chinese factories are designed to employ lean processes, efficient methods, and scale-able (aka increase-able) production methods.
5. NIO can be a very successful car manufacturer in its own market; China is the largest car market in the world.
6. NIO has a government subsidy in China for electric cars. Tesla doesn't because it is imported.
7. China is adopting electric cars en masse. Especially in the Shenzhen port city and the Guangdong region.
8. Strong endorsement by German Formula 1 Champion Nico Rosberg.
9. NIO price tag is around 450,000 Chinese Yuan. This is about half the price of the Tesla Model X in China.
10. NIO's product is fairly equivalent to Tesla Model X in terms of range and power; it has a 300+ kilometer range and acceleration of 0-100 kph in around 4.5 seconds. This is all on par with Tesla Model X.
11. The NIO ES8 has an in-car virtual assistant. It is a round orb with a digital face that can smile and help you perform tasks; kind of like an Amazon Alexa or Apple Siri. It will help you perform tasks such as navigation, inform your partner you're on your way home, and even take a photo and post it to your social media of yourself in the car.
12. NIO, like Tesla, is also focusing on self-driving technology development. The approach is a little different than Tesla's approach; in laymen terms Tesla's approach seems to be highly software intensive and less hardware intensive; NIO so far seems to be more hardware intensive and the software is probably likely behind that of Tesla's. Hardware is designed by MobileEye, the Israeli company that spun out of Tesla in 2016. The NIO ES8 will likely employ 5 cameras; 12 ultrasonic sensors; and 5 radars. Tesla's Model X to my knowledge currently uses 1 radar, similar ultrasonic sensors, and 8 cameras.
13. China's government is very pro electric vehicles as it wants to get air pollution in its cities to a manageable level. The Chinese government plans to build/subsidize chargers throughout the country for electric cars and to encourage EV adoption.
Weaknesses:
1. Tesla, NIO's direct competitor, has much more experience building and selling cars.
2. NIO doesn't have a dedicated factory yet?
3. Tesla will obtain a Chinese government subsidy once it builds a Tesla factory in China that will supply Tesla vehicles in China.
4. Tesla has greater brand prestige; this deserved goodwill extends to trust in the product due to Tesla's technological achievements and safety record.
5. Chinese cars are known for poor safety and crash test ratings. While NIO stresses its good initial crash tests, perception is still not there yet.
6. NIO is not poised for success in other electric vehicle markets; notably USA, Norway, etc. It is uncertain when NIO plans to enter the USA market.
7. NIO doesn't have a charging station infrastructure yet.
8. A large population of Chinese car owners live in apartment complexes with communal garages. Communal garages don't always have electric car chargers; adding one can be costly. Compared to those who live in the USA, where many EV owners live in single-family residences and can easily add an electric car charger.
9. NIO reliability is unknown.
10. NIO wants to employ a battery swap process, a project that Tesla abandoned due to logistics and its illogical business model (why would consumers buy the bigger battery which is more profitable if the battery can be swapped in 3 minutes)?
11. NIO wants to employ a similar retail concept as Tesla with showrooms, lounges, etc. It's starting from a disadvantage. Retail is also extremely expensive and consumers respond better to high-end products (like Tesla). NIO is aiming for a mid-end segment, more study needs to be done here to see if the retail marketing concept aligns with the market.
12. Audi, BMW, Mercedes-Benz, Ford, Toyota, Honda, Chevrolet, and others are all involved in an electric vehicle. These companies have large market dominance and history within the automotive space. These incumbents are not likely to be quickly cast aside by Tesla and NIO.
13. NIO's ES8 is touted as a 7 seater, but the last row may be very uncomfortable for adults. Tesla's Model X can seat 7 normal sized adults comfortably.
14. Personal tastes; NIO's ES8 has a polarizing design that is likely to be less well received than the "bland" Tesla Model X.
Overall, I'm pleased that Tesla has another competitor in their midst that will spur further innovation and growth. We are witnessing the infancy of the electric car industry; things will change, and when they do, it's only likely to get better! A bright future ahead for electric vehicles! Please comment below! Do you like analyses? What are your thoughts about EVs and NIO?
NIO's ES8, aka Tesla Model X Competitor.
NIO still has a some of those typical "Chinese Company Woes" such as incorrect English spelling in major documents, press releases, and corporate marketing videos. Notice the punctuation and spelling in the screenshot above (Credit: NIO.io website). NIO could definitely have some room for improvement in their marketing department!
Full
Disclosure: Moderator Patrick_y is a shareholder of NIO and Tesla
Motors. The author's opinions are of a personal nature and do not
reflect the opinions of PuristSPro. The author is also not a Certified
Financial Advisor, and thus is not offering any investment advice. NIO
Corporate did not solicit Patrick_y to create this post, this post was
created by Patrick_y upon his own initiative.
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