Editor's note: This is a guest post from Rafi Khan, an Nio investor, and does not represent the views of CnEVPost.
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Bosch on Wednesday announced closure of its Malaysian factory which supplies Nio, TSLA, Audi, VW, BMW & others. Audi Production may be closed due to this.
Here is why this may be GOOD news for Long Term (one year plus period Nio Bulls)
Consider Scenario where ICE & even EV Sales could be delayed until:
a) NeoPark is completed giving Nio largest Global EV Manufacturing Hub (Q3 2022)
b) ET7 is fully tested & launched
c) 2 New Nio models are developed in 2022
What Nio would lose: Possibly 4,000 to 10,000 EV sales per month whilst Nio continues to only offer SUVs which are small segment of total Premium Luxury market.
What Nio would gain: Delay in sales of MILLIONS of ICE Vehicles for all major manufacturers causing Pent Up demand for Nio until perfect time when Nio could offer competitive products across its entire Premium Luxury segment with massively increased capacity.
Picture yourself as CEO of Nio in place of William Li sitting on $7.5 Billion cash
Would you trade:
a) 2,000 lost in Monthly EV deliveries currently for…
b) Closure of Audi Factory plus reduced capacity at BMW, TSLA & others causing 200,000 Plus in lost monthly Sales whilst you have no Sedan to offer & no completed Neo Park.
Of course you take that trade in a heartbeat which is why Bosch factory closure is arguably good news for Nio vis a vis its much larger competitors.
Nio Share Price in Q3 2022 would be based only on Sales & Profits at that time plus future outlook & past supply chain constraints would the totally irrelevant -- hence importance of long term view.
If you delay Two Million in Sales of BBA ICE & TSLA EV sales, over next 12 months, due to current supply chain problems, given all pent up demand that creates, until Neo Park is completed -- that is a dream scenario for Nio.
Because you are delaying sale of Nio competitor's vehicles until such time as Nio has built up its capacity & its product line.
Never underestimate myopia of short term investor – he cannot see beyond daily movement in Nio stock.
In Q3 2022, with Phase 1 Neo Park completed, you could have Nio monthly sales of 70,000 with ASP RMB 500,000 with monthly profits over RMB 10 Billion.
Plus another Neo Park type project in the works.
Current supply chain constraints on Auto Industry increase chances of such a scenario by increasing pent up demand.
Not a Financial Advisor Nor Auto Analyst JMHO DYODD
(Photo source: CnEVPost)
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