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Why Nio Stock Is Higher Today

By John Rosevear - Jan 12, 2022 at 1:02PM

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We knew Nio sold lots of vehicles last year. Now we know that it got strong prices for them, too.

What happened

Shares of Chinese electric-vehicle maker Nio (NIO -4.38%) were trading higher on Wednesday, after the company's communications chief shared some upbeat details around Nio's pricing performance in December.

As of noon ET, Nio's American depositary shares were up about 3.3% from Tuesday's closing price.

So what

We know that Nio has been selling a lot of vehicles. The company's deliveries were up 109% in 2021 from the year before, despite a lack of new models -- something that could have been a significant handicap in China's fast-moving new-car market. (Electric vehicle investors currently expect Nio to launch three new models in 2022.) 

And we now know that Nio has been getting very good prices for all of those new vehicles. Ma Lin, Nio's corporate communications chief, said in a WeChat post that the average sales price across Nio's 3 current models in December was 443,500 Chinese yuan, or about $69,700. Only Mercedes-Benz had a higher average price in China in December. 

Put another way, Nio is getting better average prices than global luxury stalwarts like BMW and Audi in China -- strong evidence that Chinese consumers see Nio as a brand worth a premium price. 

That's clearly bullish, and that's probably why the stock was up at midday.

A Nio ES8, an upscale three-row electric SUV.

Nio's pricing was very strong at the end of 2021. Even its oldest model, the flagship ES8 SUV, is generating impressive average transaction prices. Image source: Nio.

Now what

With three new models expected in 2022, one might reasonably ask how Nio's oldest model, the large ES8 SUV launched in June of 2018, is holding up. The answer: quite well. Ma said that the average selling price for the ES8 in December was over 536,700 yuan (about $84,400), a record for the model. 

All these numbers suggest that Nio's fourth-quarter revenue and gross margin are on track to come in at the high ends of the company's guidance ranges, or perhaps even higher. We'll learn more when Nio reports its fourth-quarter financial results, likely in mid-February.

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