NIO Inc: NIO US/9866 HK/ NIO SG

Charging Toward Inflection, Braving the Currents of Risk

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Continuing the EV month on the Substack, we are now entering the heated debate territory. Li Auto (discussed here) is a company that has achieved profitability and effectively escape velocity. While absolutely not everyone will share my optimistic view and valuation of the company, it is undeniably profitable and cash rich, and as such quite secure in its position. NIO is an exact opposite. It has all the makings of a great success story - good management, daring technology, strong brand, but it lacks the most important part of being a successful car company - scale. At full tilt, NIO is in a different stratosphere in terms of valuation, but as it stands today it still needs to show its investors that it can get there. Early believers will get handsomely rewarded if the company pulls it off. what follow is an exploration of the topic