What happened

Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were moving higher on Thursday morning. Investors are looking ahead to the company's annual NIO Day, set for Saturday, when it is expected to reveal a new sedan model and longer-range battery packs.

As of 10:15 a.m. EST, NIO's American depositary shares were up about 5.2% from Wednesday's closing price.

So what

NIO Day is the company's annual party for its customers and fans, typically held a few weeks before the Chinese New Year. In addition to live music and assorted festivities, NIO uses the occasions to reveal new models and provide updates on its technologies. 

Here's what NIO has told us to expect at this year's edition:

  • A new sedan model, likely a production version of the ET Preview concept car that NIO showed in 2019.
  • A new 150 kilowatt-hour (kWh) battery pack that will be an option on the new sedan. I expect that -- like the 100 kWh pack NIO introduced in November -- it will also fit into existing NIOs, offering owners the option to upgrade to a longer-range pack. 
  • New driver-assist technologies. (NIO has described its new system as "autonomous," but auto investors should note that word is used somewhat more freely in China than in the U.S. It's likely that NIO's new system will fall short of true Level 4 self-driving, but we might be surprised.)

Anticipation around those announcements is probably helping the stock move up today.

The NIO ET Preview, a sleek white electric sedan.

NIO's new sedan is likely to closely resemble the ET Preview concept car, shown in 2019. Image source: NIO.

Now what

There may be a surprise or two at NIO Day. One possibility: Chinese auto-industry news site Yuguan Auto Market reported that NIO has signed a deal with battery giant Contemporary Amperex Technologies, or CATL, to buy lithium iron phosphate batteries. 

Lithium iron phosphate batteries were largely superseded for most electric-vehicle applications by ternary lithium batteries several years ago, but they've recently gained popularity with upscale EV makers in China as a lower-cost option. Battery packs using lithium iron phosphate cells are less energy-dense than ternary batteries, meaning they're heavier and offer less range, but they also cost less to produce. 

A couple of NIO's direct rivals -- XPeng and Tesla, in some of its China-market models -- have begun offering lower-cost models with lithium iron phosphate batteries. It's possible that NIO plans to follow the same path. 

If so, that might be incrementally bullish for the company's sales. We'll learn more on Saturday.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.