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NIO Stock: 3 Key Things for Investors to Watch Ahead of Nio Day 2020

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Sarah Smith
·7 min read
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Always moving forward. As Chinese electric vehicle maker Nio (NYSE:NIO) preps for its annual Nio Day event, that is the message it is sending to users, shareholders and international fans. Investors are already hooked, sending NIO stock up ahead of the event. Dive in with InvestorPlace below for what to watch.

A Nio (NIO) store at night in Shanghai, China.
A Nio (NIO) store at night in Shanghai, China.

Source: Robert Way / Shutterstock.com

To start, investors should really appreciate the power of always moving forward. Nio started 2020 with shares trading just above $3, then ultimately hit a 52-week high above $58. Fans who stuck with the electric vehicle play along the way have seen nearly 2,000% gains in just the last year.

Importantly, these near-2,000% gains comes alongside a broad electric vehicle craze. Dozens of new companies have entered the public markets. Tesla (NASDAQ:TSLA) became the most valuable automaker by market capitalization. Catalysts, including the novel coronavirus, have accelerated consumer adoption of everything electric. Now investors just have to figure out what role Nio will play in the electric future … and how high NIO stock can go.

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Nio Day 2020 promises to help answer those questions. As you prep for the event, here are the top three expectations moving NIO stock.

Nio Day Expectation No. 1: New Self-Driving Sedans

Investors want new vehicles, and Nio has promised to deliver.

The red-hot company ended 2020 with the ES6, ES8 and EC6 models in production. The latest, the crossover EC6 vehicle, launched in September 2020 and is just starting to pick up steam. During the third quarter the company delivered just 16 of the new model. In its December 2020 delivery update, Nio shared that it had delivered 2,505 EC6 models.

Even as Nio continues to ramp up the EC6, it is already looking to the future. During its third-quarter earnings call, company executives shared that they have a strategic plan for unveiling new cars. Essentially, Nio is trying to move into each corner of the passenger car market one step at a time. After launching the crossover, this means the company is next going to launch a sedan.

So what do we actually know right now? Since the company teased the EE7 sedan on its mobile app in October 2020, investors have been trying to learn more. Those answers will come on Saturday, as the company has promised Nio Day will include the sedan unveiling. We do not yet know if it is in fact the rumored EE7, and even the teaser from October reveals little about its size and shape.

However, according to a company press release, we do know that the flagship sedan will come with autonomous driving tech. In fact, this was a big focus of the third-quarter conference call. CEO William Li has promised that Nio is advancing its self-driving platform which it calls NP 2.0.

What to watch: Look for details on the sedan, including when Nio expects it to be on sale. Other key details include what autonomous tech is in the sedan — and where Nio is sourcing things like LiDAR sensors. Rumors call for the sedan to have Level 4 autonomy.

Nio Day Expectation No. 2: New Batteries Will Boost NIO Stock

Investors are quickly learning that while new cars are exciting, batteries are more critical for advancing electric vehicle adoption.

Just look at the EV landscape. Tesla remains in the spotlight for updates to its battery technology. Recently-public QuantumScape (NYSE:QS) was on a tear thanks to news its solid-state battery could achieve an 80% charge in 15 minutes. And the 100 kilowatt hour battery from Nio generated massive amounts of excitement.

Why? Better batteries often weigh less, and reduce overall vehicle costs. They eliminate anxiety over driving range, allowing cars to drive farther and charge up faster. As electric vehicle batteries start to truly rival the convenience and power of traditional automobiles, the landscape shifts. Better batteries essentially help convert consumers to the all-electric world.

Nio has been making a big bet on that reality, introducing its 100 kWh battery and battery-as-a-service business model. Now, there are two more things for investors to watch on Nio Day that could boost NIO stock.

The first is the 150 kilowatt hour battery, which Nio promised in an event press release. Investors should be paying close attention to pricing details and how this affects the battery subscription model.

Additionally, questions still remain about the 100 kWh battery. When will it start to meaningfully affect the bottom line for Nio? And if rumors that Tesla is producing a 100 kWh battery of its own for the Model 3 prove true, what will that mean? Look for Nio to answer these questions and tie the 150 kWh battery into greater consumer adoption.

The second thing to watch is a potential deal between Nio and Contemporary Amperex Technology (CATL). According to accounts on WeChat, Nio wants to make its vehicles more accessible by lowering battery costs. To do this, social media users allege it has contracted CATL to help it produce cheaper lithium-ion batteries. Any confirmation of this could be big news for NIO stock.

Nio Day Expectation No. 3: International Expansion Is Coming

International expansion is coming for Nio. If the company confirms that at Nio Day, look for a major move in NIO stock.

Importantly, the international story has been cooking since August 2020. As CNBC reported, Nio told reporters then that by the second half of 2021, he hoped to be making cars for international markets. First on his list was Europe.

Since then, there has been really nothing but speculation on the international expansion front. That is why, as InvestorPlace analyst Luke Lango tells it, most investors see NIO stock as a China story.

The company makes and sells its vehicles in China, and appeals to Chinese consumers. It also gains attention for competing against Tesla within the Chinese market. But if NIO stock could break out of that mold and become an international story like Tesla, Lango thinks everything would change. In fact, Lango thinks international growth would merit a $150 price target.

That $150 price target may finally become relevant. Ahead of Nio Day, many keen-eyed fans have been perusing social media sites for more information about the company. On LinkedIn, those fans found a series of Nio job postings in Norway, including a delivery specialist, a service advisor and a finance controller.

Granted, Nio has job postings for the United States, where it also does not have a footprint. However, given the comments from August, new Norway postings are quite exciting. Stay tuned for any confirmation — or even further hints — that expansion is coming.

The Bottom Line on NIO Stock

There is no denying that a lot of exciting things are in store for Nio fans during the Nio Day event. However, many investors may be wondering just what impact Nio Day could have on NIO stock.

As we wait for more details on the flagship sedan, 150 kWh battery and international expansion plans, consider these words from Lango:

If you believe NIO is following in the footsteps of Tesla — which is totally credible — then the new Nio Sedan could do for Nio what the Model 3 did for Tesla: Propel the company out of its premium niche and into the mainstream.

It really does seem now that Nio is always moving forward. Nio Day will show us just how far forward the company is moving to start 2021.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Sarah Smith is a Web Content Producer with InvestorPlace.com.

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