$NIO Inc (NIO.US)$ The question about NIO has been how they ...
$NIO Inc(NIO.US$ The question about NIO has been how they make money.
1] Batteries are a significant expense for BEVs. Until batteries cost considerably less per KWH the cost of the batteries almost overcomes the simplicity of Bevs when compared to ICEs. NIOs battery swap strategy is great for consumers but it forces NIO to make more than a single battery for every car sold (the battery in the car (1) plus all the batteries in the swap stations divided by the number of cars on the road) = number of batteries per car -- at least 1.2. Possibly as much as 1.6 or 1.7.
Last I heard NIO was still outsourcing manufacturing so they cannot take advantage of economies of scale. Also they cannot insure super efficient automated factories like Tesla has built. So, even aside from the batteries the manufacturing cost will be more than Tesla. Note that they are relying on a government owned and run manufacturing company to make the cars. Unless that company charges below cost there is pretty much no chance that the cars won't cost more to manufacture, possibly a lot more than Teslas.
At the present the Chinese government (I suspect) is highly subsidizing NIO. But that can't last forever. Remember how long $Tesla(TSLA.US$ took (eight years at least from release of the Model S) to become truly profitable. I don't see an easy path to profitability for NIO, as they have to keep selling costs in line with the far more efficient Tesla.
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windstay : Your rationale stands if the batteries are a cost centre, but not Nio’s batteries as BAAS is a profit centre in itself. The only thing about BAAS profit centre is that the breakeven takes quite a long time. The subscription income breaks even with the initial discount on the car sales price after about 6 years. Beyond that the monthly subscription becomes pure profit.
Muriel Melber : This will be banned from US markets in short order.
Twinkle_Boo Muriel Melber: Doubt it.
Peacefulnne Twinkle_Boo: I doubt as well. We would've heard somthing negative out of China by now.
moonoooooo : Maybe someone finally woke up out of their leftie stupor and realized they don’t want all their members to forget them.
YC Xiao : No matter what the naysayers say, at $40 is ridiculous low price. Great potential for growth.