Inventions and launching of new products have a way of affecting the stock prices of many companies. Being able to identify these little changes and analyze them to see how they affect the stock prices positively or negatively makes one a better investor than the other.
NIO is the company we will be analyzing today and how the launch of their one-hundred kWh battery is affecting their market performance. Many investors, shareholders and potential shareholders are still trying to digest and analyze the possible outcomes of this launch event.
Hello viewers, you are welcome to another blog from my website. As an investor, I take the time to note changes in the market and also share my opinions and thoughts on any changes in the stock market.
Have you subscribed to my newsletter? If not, then I suggest you do so and you will receive emails for all my upcoming articles! In this particular blog, we will be discussing the new NIO launch.
We will also be analyzing how this may affect the market in any way. Listen closely because I will try my best to analyze where the company may be heading. Remember that all my blogs are opinion-based; therefore, you can always do your research carefully before making any investments.
I need to point out that events like these should be attended by shareholders and potential shareholders. Some may ask why that is. Well, it is because you can have a pretty good idea where a company is going to be in the near future by just attending these events.
First, I think we need to know exactly what the launch event was all about. The headlines read “NIO launches the 100 kWh battery with flexible battery upgrade plans”,
But what does this mean? It means that the 100 kWh battery they launched is top-notch technology which features highly integrated designs, bi-directional cloud BMS, climate thermal managements, and even thermal propagation prevention.
There is even better news because the upgrade plans of this Battery benefit all users of NIO products because of the flexible yearly and monthly upgrade options, giving better affordability. There is also an option for battery subscription for this particular 100 kWh battery.
The company NIO had to come up with this product to be able to stay in the competition. Better batteries definitely mean better range and performance, and consumers are fully aware of this. Range and performance are major concerns for consumers, and NIO has shown its commitment towards satisfying its customers by using innovations and R&D in battery technology.
The 100 kWh battery has filed and gained over three hundred patents because it features the Cell to Pack (CTP) technology, meaning it realizes higher energy density of up to 37%. Now, the range of NIO products has increased to about six hundred and fifteen kilometres.
NIO must have known that this launch event may affect sales a little, knowing that people may have to wait for this product to be tested by other consumers before they buy, and this has always been the case with launch events of other companies.
So, how did NIO tackle this problem?
They announced that their models with this new 100 kWh batteries would only be available for pre-order from 7th of November, 2020. They also stated that users of the former 70 kWh battery have the option of choosing to buy the new product for a permanent upgrade or use the flexible upgrade option at about RMB 7,980 annually or RMB 880 monthly. These flexible options were bold moves by NIO to take care of the different needs of their consumers.
With these options, the sales will not be affected negatively since there is no reason to wait when you can buy what is existing and upgrade later. There is also another option provided by NIO called Battery as a service (Baas) which allows its customers to buy the NIO products without batteries and then swap batteries depending on their urgent needs. For instance, say a customer needs an NIO car with the new 100 kWh battery, they can do so with the Baas. This simply means that RMB 128,000 will be discounted from the price of the car, but the customer will have to subscribe to a monthly fee of RMB 1,480 monthly.
The next question is, what does this launch and changes in the Battery mean for the NIO outlook? Will it be bullish or bearish?
Look at this from the investor’s side. With all these advancements and innovations to satisfy their customers, I believe they are heading in the right direction. The most important component of these EV cars is the Battery. Doesn’t it sound great to know a company has made provisions for upgrades and swaps whenever you feel like it? Take Tesla, for example, the fact that there is no provision for upgrade or swap, people keep waiting for newer technologies and therefore refuse to buy the already existing products, and this is not good for sales.
Some may ask if this is a buying opportunity, and my answer to that is “Not yet”. There is no need to rush into investments yet. I want to and advise investors to wait for their earnings report before making any decisions to buy or sell shares. Even with the excitement that came with the announcement and possible launch, stock prices of NIO are still flat, which is yet another reason to wait and analyze.
Advancements in technology and innovation are good for the market and for customers in the short and long run, so if NIO keeps innovating and expanding, other companies will be forced to do the same. In fact, I am hoping other companies adopt this upgrade and swap ideas for their models, for instance. I believe you have learnt something new. If so, please share this blog. Also, do not forget to subscribe to my newsletter and drop your views and comments below.
Recommended for further reading:
- Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week
- The Barefoot Investor: The Only Money Guide You’ll Ever Need
- Investing QuickStart Guide
- Investing Demystified: How to create the best investment portfolio whatever your risk level
- The Five Rules Successful Stock Investing: Morningstar’s Guide to Building Wealth and Winning in the Market
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