January 9th marks NIO’s fourth NIO Day. This time around, the car maker is organizing a launch of its new sedan, and to address autonomous driving and other new technologies. NIO [$NIO] comrade XPeng [$XPEV] held a similar shindig in October to analyze its autonomous driving tech. XPeng also linked up with a lidar—short for laser-based radar—company, which produces sensors that help cars spot oblique objects.
Deutsche Bank [$DB] analyst Edison Yu noted that NIO’s autonomous-driving tech will likely come with lidar sensors, along with its proprietary software and lower-cost lithium iron phosphate batteries to expand its consumer base. Advanced safety features, like driver assistance software, are becoming a critical facet of competition for the industry. Li Auto is Making a Name for Itself in the EV Space
Yu goes on to forecast that the new car will be a mid-to-full-size sedan in the premium segment of the market, and that it could enter production as soon as late 2021. Mid-to full-size premium electric cars are probably most comparable to a Tesla [$TSLA] Model S. NIO’s three current models are SUVs.
NIO contracted a production line of lithium iron phosphate batteries from CATL, China’s largest automotive lithium-ion battery maker, and the new cells are being tested and prepared. Moreover, Yu believes that the company will talk about new battery swapping tech. To pinpoint the problem of protracted EV charge times, NIO substituted the entire battery pack so drivers can get back on the road with a full charge in just minutes. Walmart Jumps Into Self-Driving Vehicle Space
Yu rates NIO stock at Buy, but he has a $50 price target for shares, about 6% below Tuesday’s closing price of $53.20. Most analysts are partial to NIO stock. In fact, around 65% of analysts covering the company pegged shares at a Buy. The average Buy-rating ratio for stocks in the Dow is about 57%. The average analyst’s price target is about $48, slightly below Yu’s.
Since then the company has announced strong deliveries and Saturday’s event. Even with the recent good news, the stock is still expensive. Shares trade for about 15 times estimated 2021 sales. NIO stock rose more than 1,100% in 2020. And in the first trading days of 2021, shares have gained another 9%, outperforming the S&P 500’s roughly 0.8% decline. Uber Unloads Self-Driving Unit to Aurora