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A NIO es6 car is on display at the Beijing Motor Show.
Wang Zhao / AFP through Getty Images
Chinese manufacturer of electric vehicles
NIO
it watched its stock price fall on Tuesday after reporting a drop in February deliveries, which seemed to bother investors. But securities analysts have focused on the global microchip deficit.
NIO shares fell about 8% when trading at noon on Tuesday. The S&P 500 and the Dow Jones industrial average fell by about 0.3% and 0.1%, respectively.
Wedbush analyst Dan Ives pointed out that the shortfall will be a short-term overrun not only for the NIO (ticker: NIO), but for all its competitors.
“The chip shortage has had an impact on the global auto industry as well
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Recent price reductions have affected some positive market dynamics for the NIO … although we believe this will be short-lived, ”Ives wrote in a report on Tuesday. He still sees the “jaw drop” of EV demand in China and expects NIO and others to sell everything they do.
Barclays analyst Brian Johnson said Tuesday that industry data provider IHS estimates that 1 million cars may not be built in 2021 due to a lack of chips.
In a winning call on Monday, NIO officials said the company has enough chips to reach production targets by the second quarter; However, Johnson fears chips will continue to run as the year progresses.
World car companies produce about 90 million cars a year. The IHS data point is a way to measure the problem of lack of chips. “IHS noted that the additional supply, which could offset the volume lost in [first half 2021], will be delayed until [the fourth quarter] and reach 2022, ”Johnson wrote.
However, Ives and Johnson do not cover NIO. Deutsche Bank analyst Edison Yu does. He rates the company as a Buy and has a target price of $ 70 per share.
Yu believes that despite supply chain issues, the NIO could reach 100,000 deliveries in 2021, although it projects 96,000. He expects monthly production to increase from about 7,500 to about 10,000 by summer. “In the longer term, we see more areas of untapped growth,” Yu wrote. He predicts that several NIO models and cars will be sold worldwide.
Goldman Sachs analyst Fei Fang is not as ugly as Yu. Fang values NIO Hold shares and has a target price of $ 59.
However, Fang believed the quarter was solid and was encouraged by the success of the “battery as a service” business model. NIO will sell an EV without the cost of a battery and then, in essence, will rent the battery to consumers for a monthly fee.
At the launch of the service, the monthly fee was 980 yuan, or about $ 140. The fee includes six battery exchanges per month. Variable accounting, ie about 1,500 miles of range.
About 55% of new NIO buyers select the rental option and the percentage increases each month, according to management. Fang wrote that the rental model improves the use of the 200 NIO stations changed by the battery.
Write to Al Root at [email protected]