Title: Will Onvo and Firefly Propel NIO's Stock in 2025? A Fresh Perspective
Nio's stock soared in December 2024, reporting an impressive 73% year-over-year increase in vehicle deliveries, totaling 31,138 units. This figure also represented a 51% increase from the previous month's 20,575 deliveries. In comparison, rivals Li Auto and Xpeng saw deliveries of 58,513 and 36,695 units, respectively.
To cater to broader market segments and niche needs, Nio expanded its portfolio by launching its value-priced Onvo brand in September 2024. The Onvo L60, its first model, is priced between 200,000 RMB ($28,000) and 300,000 RMB ($42,000). Onvo delivered 10,528 units in December, a significant leap from the 5,082 units in November. For the entirety of Q4 2024, Onvo delivered a whopping 19,929 vehicles, marking a remarkable upswing from the 832 units in Q3 2024. Onvo's ambitions extend beyond China, with plans to launch two SUVs in 2025 — a seven-seater and a five-seater ready to challenge Li Auto's Li L8 and Li L7 vehicles.
Last month, Nio unveiled another endeavor, the Firefly brand, targeting the high-end compact car market. Set to take on rivals like BMW's Mini and the Mercedes Smart series in China, Firefly pre-sales commenced with prices starting at 148,800 yuan (approximately $20,500). Although luxury compact EVs remain a niche segment in China, there's a substantial market for small EVs, especially in densely populated areas. This could potentially open new growth avenues for Nio. Furthermore, Firefly could potentially help Nio gain traction in Europe, where compact cars dominate the market.
Despite Nio's stock not experiencing significant growth over the past few years, the Trefis High Quality Portfolio, comprising 30 stocks, has delivered better returns with less risk compared to the S&P 500 index in the past four years. The Trefis HQ Portfolio performance metrics reflect this stability. However, in the midst of an uncertain economic climate, with potential rate cuts and multiple conflicts on the horizon, the question remains: will Nio rebound or fall short of the S&P 500's performance in the next 12 months?
Nio's valuation remains appealing, with the stock trading at approximately $4.50 per share, or roughly 1x consensus 2024 revenues. This is significantly lower than Tesla's valuation, which trades at around 13x revenues despite projected 2024 revenues likely to remain stagnant. For a more detailed analysis on Nio's standing against Li and Xpeng, check out our report on "Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare?"
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Nio's Onvo brand, introduced in September 2024, saw a significant increase in sales with 10,528 unit deliveries in December, marking a notable leap from the 5,082 units delivered in November. The success of Onvo contributed to a total of 19,929 vehicles delivered in Q4 2024, showing a remarkable upswing from the 832 units delivered in Q3 2024. The Nio valuation, with the stock trading at approximately $4.50 per share, is appealing, as it represents 1x consensus 2024 revenues, which is significantly lower than Tesla's valuation of 13x revenues.
