/EV%20in%20showroom%20by%20Robert%20Way%20via%20Shutterstock.jpg)
For fans of hard-hit electric vehicle maker Nio (NIO), could its Nio Day 2024 be an upside catalyst? The event, scheduled for Dec. 21 in the Guangdong province of China, regularly draws the interest of investors and analysts. Nio uses the event as a chance to unveil new products and features.
This year, investors expect two big announcements to be the official unveiling of its ET9 sedan and the official launch of its Firefly brand. Ahead of Nio Day 2024, the company shared several images of the ET9 on the Weibo (WB) platform. So far, the company has teased the ET9 as a “flagship” model with a luxury interior and its latest assisted driving technology.
Earlier in 2024, Nio announced that it would be launching the Firefly brand for budget-focused drivers. The company previously launched another sub-brand, Onvo, which it says is geared toward families. Ahead of Nio Day 2024 the EV company has created social media platforms for Firefly and revealed its logo. At the actual event, investors and analysts anticipate more details about the brand as well as the unveiling of its first model.
About Nio Stock
Based out of China, Nio has benefitted from investor attention on electric vehicles and renewable energy. Along with its peers Xpeng (XPEV) and Li Auto (LI), Nio shares raced to highs in 2020 and 2021. However, increased competition and pricing wars, as well as concerns that demand for EVs was faltering, have weighed on the stock. Nio is down over 50% in the year-to-date and 85% over the last three years.
At the end of November, the company released its unaudited results for the third quarter of 2024. Total revenue of $2.66 billion was down 2.1% year-over-year, and vehicle revenue was down 4.1% year-over-year. However, its vehicle sales during the third quarter were up 11% year-over-year to 61,855. The drop in revenue reflects a lower average selling price per vehicle, which was a result of a pricing war between Nio and competitors, including Tesla (TSLA).
Looking ahead, Nio anticipates a return to revenue growth in the fourth quarter. It projects sales between $2.804 billion and $2.904 billion, or growth of 15%-19%. Projected vehicle deliveries between 72,000 and 75,000 would represent growth as high as 50% year-over-year.
This forecast, coupled with any excitement that Nio management is able to create with its annual Nio Day event, could help catalyze the share price headed into the new year.
Tariff Threat
In addition to increased competition, Nio bears highlight the threat that tariffs pose to the company's results and growth potential. President Joe Biden already announced 100% tariffs on Chinese-made electric vehicles in 2024, and President-elect Donald Trump has proposed additional tariffs on all goods imported from China. The company had previously planned to expand into the U.S. as part of its growth strategy, potentially as soon as in 2025. In recent months, however, it has backtracked on that strategy, although CEO William Li says Nio is exploring partnerships that could help it enter growth markets.
The European Union also poses challenges to the Chinese company. Over the summer, the EU announced stiff tariffs after claiming that Chinese automakers were threatening its domestic manufacturers by “flooding” the market with their cars. EU officials claimed that because the Chinese government had subsidy programs for companies like Nio, they were able to outprice European firms.
Li has said that these tariffs are “unreasonable” and previously encouraged both the U.S. and EU to “cooperate” with China.
What Do Analysts Think
Analysts are on the fence with NIO stock. It currently has a “Moderate Buy” consensus rating with four “Strong Buys,” 2 “Moderate Buys,” 8 “Holds” and 2 “Strong Sells.” Its average price target of $5.78 implies upside potential of roughly 27%. Investors should watch to see if analysts revaluate shares following its Nio Day event.
