Latest news with #Nio
Business Insider
7 hours ago
- Automotive
- Business Insider
Nio or XPeng: Goldman Sachs Chooses the Superior EV Stock to Buy
Since 2009, China has held the title of the world's largest automotive market, driven by its vast population and a rapidly growing urban middle class. In 2022 alone, the country recorded 26.88 million new car sales. By the following year, domestic production surged past 31 million vehicles. So far this year, Chinese auto sales have made up 28% of the global total. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter A key driver of this growth is the rapid adoption of electric vehicles (EVs), which are claiming an ever-larger share of the market. Backed by robust government support and rising consumer demand, EV production and adoption have soared. China is now home to around 100 active EV makers, and its EV market is the largest in the world. According to Fortune Business Insights, the electric car market in China is expected to grow at a strong CAGR of approximately 18.4% through 2030. But with this rapid expansion comes intensifying competition. The EV boom has turned the market into a fierce battleground, where price wars and shrinking margins are becoming the norm. For investors, the rapid expansion of China's EV sector brings both opportunities and pitfalls. Goldman Sachs analyst Tina Hou is closely following the action, focusing on two of China's most prominent EV names: Nio (NYSE:NIO) and XPeng (NYSE:XPEV). Her insights aim to separate the leader from the laggard, and help investors determine which stock offers the more compelling case. Let's take a closer look. Nio We'll start with Nio, one of China's innovative electric car makers. Since its founding in 2014, Nio has developed a line-up of EV models, nine under its own nameplate along with additional models under the Onvo and Firefly brands. The company's vehicle lines include several sedan and SUV models, combining luxury styling, the latest EV tech, digital dashboards, and long-range battery systems. On pricing, Nio aims to run the gamut – from low-end budget models to high-priced luxury offerings. At bottom, the company's Onvo and Firefly brands feature ticket prices as low as $16,700 for Firefly's low-cost trim, to $33,400 for the top-end Onvo model. Nio's eponymous nameplate features vehicles such as the ET5, at $41,000, the ET7, priced at $59,000, and the ET9 for $90,000. Vehicle pricing is based on battery technology and packages, vehicle trim levels, and idiosyncrasies of local region and market conditions. Nio backs up its vehicles with a solid service network. The company pioneered EV battery swapping in China, developing a network of swapping stations where vehicle owners and drivers can pull in and replace depleted battery packages for new ones – without having to wait for recharging. The service is offered on a subscription basis, and has proven popular with Nio's customer base, as it solves two 'pains' that EV drivers frequently complain of: long battery charging times and high battery costs. We should note here that Nio has faced headwinds in recent months. The company's stock is down 22% year-to-date, after the firm has faced difficulties hitting sales goals and has cut delivery guidance. The lowered guidance has come alongside lower delivery numbers and increased quarterly earnings losses. On the delivery side, Nio delivered 23,900 vehicles in April of this year, for a 53% year-over-year gain; in May, that number was 23,231 vehicles, for a year-over-year gain of 13.1%. On revenue and earnings, Nio reported $1.66 billion in 1Q25, up 21.5% year-over-year but missing the forecast by $70 million. At the bottom line, Nio's non-GAAP EPS loss in Q1, of 41 cents, was 4 cents per share below the forecast; the company's net loss was 24% deeper than in the prior-year quarter. In her write-up on Nio for Goldman, analyst Tina Hou notes that company management is actively working to improve efficiencies and mitigate losses, but has not reaped the benefits yet. 'Nio has been focusing on cost reduction through a series of cost control and efficiency improvement measures since Mar, including terminating low return projects, and integrating R&D and S&M teams to support multiple brands with a c.20% headcount reduction. By doing so, management aims to achieve 20%-25% opex optimization and profit breakeven in 4Q25… Although we believe Nio's cost reduction efforts would help improve the company's R&D and operational efficiency, we remain relatively more conservative on Nio's FY25 sales volume compared to management's target largely due to the ongoing industry competitive intensity, YTD run rate and overall demand outlook,' Hou stated. Hou follows these comments with a Neutral (i.e., Hold) rating on NIO, along with a $3.80 price target that points toward a one-year upside of 11%. (To watch Hou's track record, click here) This view is in line with the Street's consensus; Nio has a Hold rating, based on 11 recent reviews which include 2 to Buy, 8 to Hold, and 1 to Sell. The shares are priced at $3.42, and their $4.51 average price target suggests a ~32% gain in the next 12 months. (See NIO stock forecast) XPeng, Inc. Next on our list here is XPeng, a fast-growing EV maker in the Chinese market. The company is based in the southern city of Guangzhou, where it was founded in 2014. XPeng started regular vehicle production in 2019, and in recent months has seen its production and delivery numbers grow rapidly. XPeng's current success is based on a line-up of battery-powered EVs that include elegant luxury models, large SUVs, a coupe, and even an extra-large seven-seater. Customers can choose from a range of features, including luxury-styled interior finishing, long-range battery packs, flat-screen cockpits, and voice-activated driving assistance. XPeng's vehicles are aimed at China's growing upper-middle-class demographic, a population that has the available funds to buy high-end electric vehicles and is tech-savvy enough to appreciate and use the added smart-car technology features. While the company has put a premium on high-tech features in its cars, it hasn't skimped on basic automotive technology; XPeng's cars are powered by proven electric drivetrains to provide drivers with a favorable driving experience. To support its vehicles and customers, XPeng provides solid warranties for its vehicles and their systems, along with remote vehicle support and diagnostics, and 24/7 roadside assistance. On a more prosaic level, the company has also built up a network of 772 branded supercharging stations and 1,870 free charging stations. The network spans China, and includes 319 cities with free charging services. The company's supercharging technology includes built-in safety monitoring, to ensure that fast chargers are safe to use. In its last reported quarter, 1Q25, XPeng reported quarterly deliveries of 94,008 vehicles, covering all models. This number was up 331% year-over-year, and reflects increasing sales success in the past year. The company's most recent delivery numbers, covering this past May, came in at 33,525 total vehicles – a figure that was up 230% year-over-year. XPeng has recorded monthly vehicle deliveries of 30,000-plus for seven consecutive months. Looking at financial results, we find that XPeng generated $2.18 billion in revenues, in line with expectations and achieving a year-over-year gain of 141.5%. At the bottom line, XPeng recorded a net loss of 6 cents per share by non-GAAP measures – but that net loss was significantly less than had been expected, beating the forecast by 15 cents per share. Recognizing the momentum, Goldman Sachs analyst Tina Hou sees particular strength in XPeng's ability to scale up new model launches and maintain a steady pace of innovation. 'Since 4Q24, XPeng has shown consistent improvement in its new and refreshed model launches with Mona M03 and P7+ sales volume ranking among the top 3 in their respective segment. XPeng has also stepped up on its new model launch frequency with 10 over 2024-2026, compared to only 1-2 new models each year from 2019-2023. XPeng will now introduce 10 new + refresh models each year to better compete in today's highly dynamic market environment… We are Buy-rated, as we see the result of a series of efforts coming through that has transformed the company's product and cost structure competitiveness, leading to higher visibility for sustainable sales volume growth as well as profit margin improvement going forward. XPeng is currently trading in line with historical average forward P/S multiple in the past 1 year,' the analyst opined. That stated Buy rating is complemented by a price target of $24, suggesting a 29% potential upside for the next 12 months. The Street, generally, likes XPEV shares, and gives the stock a Moderate Buy consensus rating based on 9 recent reviews with a breakdown of 6 Buys, 2 Holds, and 1 Sell. The stock's $18.61 selling price and $24.78 average target price together indicate room for a 33% gain in the coming year. (See XPEV stock forecast) With the facts laid out, and the ratings and price targets compared side-to-side, it's clear that Goldman Sachs has picked out XPeng as the superior Chinese EV stock to buy. To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Motor Trend
16 hours ago
- Automotive
- Motor Trend
Is It Time for EV Charging Stations to Simply Offer Quick-Time Battery Swaps?
John and Jane Public aren't warming to electric cars at the rate many in the automotive industry thought they would, and that's mostly because EVs still can't match the cost and convenience of gasoline-powered alternatives. The steady march of progress is chipping away at EVs' cost, boosting the distance they can drive on a single charge, and hastening their charging speeds (1-megawatt or better is almost here). But maybe there's a holistically better idea. The article advocates for battery swapping in EVs, citing Chinese company Nio's success with its extensive swap stations. Benefits include quick swaps, cost savings, and greener energy use. The author suggests adopting this system in the West to boost EV adoption and to be able to compete globally. This summary was generated by AI using content from this MotorTrend article Read Next Perhaps it's time we dust off General Electric's plan from 1910, when it equipped its GeVeCo electric trucks with separately leased Hartford Electric batteries designed specially to be swapped quickly when depleted. Together, these electric trucks covered 6 million miles between 1910 and 1924. Electric forklifts have used battery swapping since the mid 1940s, and Israeli startup Project Better Place (later just 'Better Place') endeavored to revive that idea for electric cars beginning in 2007. Better Place was neither a battery company nor a car company, and the challenges of engaging those stakeholders, combined with an immature electric-car market, ultimately doomed the enterprise. And while Israel and Denmark might have been reasonable launch markets, our nation's size seemed logistically daunting, even if enough car companies could come to agree on a battery size, shape, or performance envelope to achieve critical mass. But experiencing Nio's Power Swap experience in Shanghai felt like gazing into a brighter EV future. CATL Goes All In Chinese automaker Nio (founded in November 2014) made battery swapping its unique selling proposition, building a network of more than 3,200 swapping stations in much the same way Tesla built its own Supercharger networks. In the seven years Nio has sold cars, it's revised the battery and station designs a few times. Its newest model, the Firefly EV, uses yet another new swappable battery, designed in conjunction with battery giant CATL and a consortium of companies. One of these, Changan, just delivered 1,000 Oshan 520 taxis in Chongqing, using similar batteries that can be swapped at any of 50 CATL swapping stations promised by the end of 2025. (Swapping is particularly valuable for taxis, ride-share services, delivery and similar commercial vehicles.) Chocolate-Bar Batteries CATL got into the battery swapping concept a while back with small 25-kWh packs that resembled two blocks of baking chocolate that could be used individually or ganged two or three to a vehicle, heightening the baking chocolate allusion. CATL's QIJI swap solution for trucks still follows this model, and the name Choco-Swap, or Choco-SEB (Swapping Electric Block) has stuck. CATL's light-vehicle strategy, however, has morphed to now covering the breadth of vehicle sizes and range needs with two battery form factors, each offering a choice of LFP or NMC chemistry. Swap Station Design Both Nio and CATL swapping stations require approximately the footprint size of three normal parking spaces, with the car driving up a ramp high enough for battery packs to shuttle underneath to begin the process. The two adjacent parking spaces typically house 24–30 batteries that remain bi-directionally connected, charging at moderate rates (up to 100 kW) to a level just past 90 percent. Nio's stations assemble like Legos, allowing a new station to be set up and operational in 4–5 hours overnight. Nio owns and operates most of its stations but is now allowing investment groups or provinces to buy, operate, and share revenues generated as power companies pay to tap this stored energy. Having sold 700,000-plus cars, 80 percent of which are still in service, Nio claims its inventory of swap-available batteries amounts to 6 or 7 percent of the on-road fleet. And to prep for big-travel weekends like Chinese New Year, heavy incentives go out to entice large-capacity battery owner/lessees who don't plan to leave town to swap down, making bigger batteries available for travelers. Anatomy of a Swap Using your car's native navigation system, a trip is plotted including convenient swap stations. As you approach one, a specific time slot is allotted, and a particular battery gets assigned to your car. Your car's battery temperature is shared, and the station adjusts the coolant in the replacement battery to match, thereby preventing expansion or thermal shock. When it's your turn, the station talks you through the process (explaining what the automatic system is doing). You sense the station lift the car slightly, you hear 10 bolts simultaneously undoing, the swap occurs, the bolts tighten, you drop back down and you're on your way. (Note: CATL says Choco-Swap batteries are air cooled, sidestepping the temperature-alignment issue.) What are the advantages? Quicker My Nio Power Swap experience replaced a depleted battery with one charged to 91 percent in less than three minutes, which included the time needed to maneuver into and out of the station. CATL's Choco-Swap requires the driver to pull in, as when entering a car wash. It then swaps packs in 100 seconds (presumably more if adding extra batteries). My ET9 showed 352 miles of range following the swap. Even 1-megawatt charging can't add that many miles that quickly—especially when multiple charging-station users lower the peak rate. Cheaper Drivers can buy most Nio cars with or without batteries included. Opting for the battery-lease deal knocks $17,900 off the luxury ET9's $110,320 price, adding a monthly battery lease of $179. Owned or leased batteries can be swapped, with drivers paying the net difference in energy at a price higher than home charging but lower than high-speed DC fast charging. Then there's the savings of leasing a small battery and simply upgrading and paying for a longer-range one only when traveling. Car companies could slash both time to market and program budgets by offloading or sharing the R&D, safety testing, warranty, and other liability costs that batteries entail. And these standard form-factor batteries can potentially be upgraded over time as new chemistries or solid-state cells become available. Infrastructure pricewise, a battery swapping station is also way cheaper to install than a bank of 1MW chargers able to serve the same number of customers. Power companies faced with adding grid capacity, sub-stations, and transmission lines to support multimegawatt charging banks could save a lot by investing in swapping stations, each of which draws way less power, can absorb excess solar or wind energy, and will help even out loads during periods of peak usage. Greener Batteries that are regularly charged at level-2 rates to 90ish percent should last longer than those that are frequently fast-charged. Each battery has a digital twin in the cloud, and when monitoring detects bad cells or modules, they can be replaced while out of the car, extending the pack's useful life. When usable capacity drops below 80 percent of new, a pack can be reassigned to non-EV use. When drivers use a lighter commuting-sized battery most of the time, they use less energy to operate and generate less wear on the tires and brakes. What exactly changed my mind on swapping? My Shanghai adventure proved China's auto industry is miles ahead of ours. It seems to me that to be at all competitive in the global market, we need to quickly overcome buyers' reluctance to electrify and up our collective EV game. It also seems like high time 'the west' teams up to fight off this Chinese threat, and an automaker/energy-industry collaboration on a battery-swapping ecosystem that ends buyers' battery-life worries while delivering gas-station refueling convenience—all at gas-vehicle operating cost parity—looks like the quickest way to get there.
Yahoo
a day ago
- Automotive
- Yahoo
Nio Eyes Strategic Investors for Chip Unit as In-House Tech Gains Traction
Nio (NIO, Financials) is reportedly in talks to bring in strategic investors for its chip business, as the electric vehicle maker seeks to unlock value from its in-house semiconductor development and reduce costs, according to a LatePost report published Tuesday. Warning! GuruFocus has detected 3 Warning Signs with NIO. Sources told LatePost that Nio will likely spin off its chip team into a separate entity and cede a small stake to outside investors while retaining control. One potential structure includes a shareholding platform that combines Nio, external backers, and employees. The move comes as Nio ramps up deployment of its self-developed Shenji NX9031 smart driving chip already powering its flagship ET9 and replacing Nvidia's Orin X in updated models like the ET5, ES6, and EC6. The switch is expected to save the company around 10,000 yuan ($1,390) per vehicle. The chip unit may now operate under a new subsidiary named Anhui Shengji Technology, which was registered on June 17 in Hefei with a capital base of RMB 10 million ($1.39 million). Nio's VP Bai Jian is listed as the legal representative. The Shenji chip, unveiled in December 2023, offers four times the computing power of mainstream alternatives and marks a milestone in China's push for EV tech self-sufficiency. Nio also introduced a LiDAR main control chip, the NX6031, in 2023. Bringing in strategic capital could support Nio's push toward fourth-quarter profitability while reducing dependence on external chip suppliers like Nvidia. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Automotive
- Yahoo
Goldman upgrades Chinese EV makers XPeng and Nio on cost cuts, product improvement
-- Goldman Sachs upgraded Chinese electric vehicle makers XPeng (NYSE:XPEV) and Nio (NYSE:NIO) on improving cost structures and new product strategies as both firms navigate an intensely competitive domestic market. The bank raised XPeng to Buy from Neutral and lifted price target to $24 from $18.60, citing improved vehicle competitiveness, stepped-up model launches, and material cost reductions. Goldman said XPeng's organizational and supply chain restructuring efforts are beginning to show results, supporting its expectations for more sustainable volume growth and better profit margins. XPeng's recent models, including the Mona M03 and P7+, have ranked among the top-selling cars in their segments, Goldman said. The company is also accelerating its product rollout, planning to launch around 10 new or refreshed models annually, up from one to two in previous years, helping it maintain visibility in a crowded market. Cost reductions have played a key role, with Goldman noting the company has achieved significant savings through component redesign and sensor suite optimization. The brokerage estimates that lower bill of materials costs have improved gross margins and lifted profitability on key models. Goldman also upgraded Nio to Neutral from Sell on early signs that recent operating cost cuts may help ease margin pressures. It raised its price target slightly to $3.80 from $3.70. Since March, Nio has implemented cost-saving measures, including project cancellations, headcount reductions, and integration across business units, targeting 20%–25% operating expense savings. However, Goldman remains cautious on Nio's volume growth, keeping estimates below company targets due to weaker-than-expected demand and rising industry competition. It also flagged ongoing cash flow concerns and noted the company's high debt levels, despite recent capital infusions. XPeng and Nio are among several Chinese EV makers grappling with thinning margins and volatile consumer demand as new model launches from rivals flood the market. Related articles Goldman upgrades Chinese EV makers XPeng and Nio on cost cuts, product improvement MS starts coverage of at Equal-Weight on balanced risk-reward Caterpillar's E&T segment is likely a core driver to the next EPS cycle: BofA Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données
Yahoo
a day ago
- Automotive
- Yahoo
China's electric car revolution is eating itself
In the world's biggest market for electric cars, a sales miracle is turning into a 'Darwinian battle' for survival. The number of electric vehicles (EVs) sold in China rocketed to 6.4m last year, accounting for more than half of all cars sold. Despite this roaring success, growth is now slowing and the market has become oversaturated with companies fighting to win over drivers. It has prompted a vicious price war that has caused alarm in Beijing. Last week, the government issued a stern warning to 16 brands including BYD, Nio, Leapmotor and SAIC Motor, which are among the country's biggest domestic brands, urging them not to destroy each other by merciless undercutting on price. Analysts believe competition is only set to become more intense, with a potentially significant impact on export markets such as the UK and Europe. It will also have consequences for Western brands such as Tesla, which are also fighting for sales in China. 'There's been a Darwinian battle, where the larger manufacturers in China are heavily discounting, and really pushing prices downwards in a brutal fashion,' says Matthias Schmidt, an independent automotive analyst. 'They're looking to destroy their domestic peers and also Western manufacturers, trying to get them to exit the Chinese market.' While the clash may be good for Chinese drivers, who benefit from cheaper cars, it is bad news for Britain. Chinese brands are charging higher prices abroad, using international sales to bank-roll price cuts at home. The battle royal is the culmination of a years-long EV boom in the country, kicked off under Beijing's 'Made in China' strategy. Recognising the fact that Chinese manufacturers were unlikely to overtake Western rivals that made traditional internal combustion engine (ICE) cars, Beijing prioritised support for future hybrid and electric models – known collectively as 'new energy vehicles'. Since then, hundreds of EV brands have emerged off the back of surging consumer demand and massive state support, including subsidies, state-backed loans, investments from local governments and huge spending on charging infrastructure. Growth has been explosive, helping China become the world's largest manufacturer of EVs by far and more recently the largest exporter of cars globally. In 2015, about 100,000 EVs were sold in the country. By 2020 the figure had jumped to about 900,000, rising to 2.7m, 4.4m, 5.4m and 6.4m in the following four years. But the rapid annual growth has slowed from 63pc to just 19pc in the past two years. That has put intense pressure on companies, many of which had built business models contingent on strong sales growth. 'There are far more EV companies in China than can possibly survive in a competitive market,' the International Energy Agency (IEA) has warned. It highlighted that one company alone, Nio, recorded net losses of $3bn (£2.2bn) in 2023. Consultants at AlixPartners have estimated that the number of EV brands will plummet from more than 130 last year to just 19 profitable companies by the end of this decade. The market is already experiencing what analysts have euphemistically called 'consolidation', with the losers forced to declare bankruptcy or pursue mergers with their rivals. To keep the sales coming in, many are resorting to aggressive discounting. But that has prompted concerns in Beijing, as companies have tended to fund this by squeezing their suppliers, paying them later and later. That threatens to have knock-on effects if those companies can't then pay their own workers and bills. Some companies are taking more than 200 days – 28 weeks – to pay suppliers, including XPeng and Dongfeng Motor, according to the Financial Times. Beijing has sought to counter this by imposing new rules that require brands to pay up in 60 days, but there are doubts about whether these rules will be followed and concerns that it may plunge some car companies into deeper trouble. 'We are entering the consolidation phase, and the way producers in China are trying to survive is by price war,' says Endeavour Tian, an automotive analyst at Rhodium Group. The discounting is often led by BYD, the biggest-selling EV brand in China. That is partly because it has more on the line. BYD owns much of its supply chain, a model that requires huge amounts of capital. This means the company is relying on high sales volumes to keep the wheels turning. 'If their revenue is not that high, then there will be problems,' says Tian. The fierce competition in China has dragged on for longer than expected as several brands are backed by local governments reluctant to let them collapse. 'The government either invests in them or provides subsidies to them or provides low interest credit, so that even when some of the producers are really at the brink of bankruptcy they're still saved - and the price war goes on,' Tian says. For example, in 2020 Nio was rescued from collapse through a $1bn (£750m) bailout by state-owned investors. Elsewhere, Dongfeng Motor and Changan Auto – both owned by the central government – are in talks to merge amid the huge market pressures. Among the chaos, Chinese drivers are ostensibly benefitting from cheaper cars. But the price wars are not necessarily good for consumers abroad. In fact, for the UK and Europe, the pressure in China could mean higher prices for longer. Already, the sticker prices of Chinese-made cars tend to be far higher when exported. For example, BYD's best-selling Seagull hatchback starts at 56,800 yuan, or about £5,900, for local buyers. But in the UK, where the car launched this year, the model (renamed the Dolphin Surf) sells for £18,650. Similarly, research by Rhodium last year found that BYD's Seal U sold in Europe for a premium of about £11,000 compared to China. 'Those sales in Europe are essentially subsidising the price war taking place in the China market,' Schmidt says. This is particularly the case in Britain, which has not copied EU tariffs on Chinese EVs. In May, Chinese brands accounted for almost one in 10 cars sold in the UK according to the Society for Motor Manufacturers and Traders. 'The UK is essentially a cash cow market for Chinese manufacturers, it's extremely profitable,' says Schmidt. 'That's the reason we're seeing the UK soak up the highest amount of Chinese cars.' The largest European destinations for Chinese EVs are the UK, Spain and Italy, which make up more than 60pc of sales combined, according to Schmidt. The price war at home means that – at least for now – fears of cheap Chinese cars flooding into Europe may be overdone. Instead, brands may want to protect their margins, says Rhodium's Tian. At the same time, while European manufacturers are finding it hard to compete in China, in Europe they are starting to catch up. Greater adoption of lower-cost lithium iron phosphate (LFP) batteries, which have long been used by Chinese brands, have allowed Western manufacturers to bring prices down on a spate of newer models, says Schmidt. The share of EVs sold with LFP batteries in Europe has increased from 3pc to 10pc in just two years, according to the International Energy Agency. Yet Western rivals shouldn't take too much comfort from this. Ultimately, Chinese brands such as BYD are more focused on growth than profits – and they still have plenty of room to cut prices. And once the Darwinian battle at home is over, the newly-crowned winners may decide to bring the price wars to Europe next. 'If they want to play out the same scenario in overseas markets, that's also doable,' Tian says. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
