Nio (NIO) stock skyrocketed more than 80% in September for its best month since June 2020, with EV sales reports for the month and third quarter due. The upstart Tesla (TSLA) challenger also announced a massive cash injection for its Nio China unit on Sunday.
↑ XFurther, China stocks rallied broadly in late September on Beijing's latest stimulus measures. China's central bank lowered interest rates to push economic growth toward a target of around 5%. In addition, China plans to issue sovereign bonds worth about RMB 2 trillion ($284 billion) this year to stimulate the economy, reports said. On Sunday, the central bank ordered banks to lower rates on existing mortgages.
And not least, Nio has just begun deliveries of the Onvo L60, a more affordable Model Y rival leveraging Nvidia (NVDA) artificial intelligence chips, just days ago.
China's EV makers are set to disclose September and Q3 sales on Tuesday. Check back for updates.
"Nvidia Drive Orin serves as the AI brain of Onvo's smart-driving system," Nvidia, which has long partnered with Nio on chips to automate driving tasks, said in a Sept. 27 press release. The latest Drive Orin system-on-a-chip can perform 254 trillion operations per second, processing sensor data from the L60's high-definition cameras and four-dimensional radar, according to the AI chip giant.
"With the integration of Nvidia Drive, the Onvo L60 is poised to deliver an advanced driving experience at an affordable price," the release said.
Nio has pitched the L60 as a higher-spec, lower-priced rival to the Model Y. The L60 starts as low as RMB 149, 900, or $21,000, without a battery. Users can opt for Nio's battery-as-a-service service. With an EV battery, the L60 starts at RMB 206,900.
Deliveries of the first vehicle from Nio's new and cheaper Onvo sub-brand began Sept. 28. It's expected to have a modest impact on September sales. But given the heavy L60 orders and Nio ramping up production, the new crossover should provide a big sales boost in October and beyond.
The Model Y, Tesla's bestselling electric vehicle by far, starts around $35,000 in China after price cuts. Tesla is being challenged by several existing and forthcoming Chinese electric vehicles, including options from XPeng (XPEV), Li Auto (LI) and Zeekr (ZK).
Those EV startups are all set to release September and Q3 sales data on Tuesday, along with Nio stock. EV giants BYD (BYDDF) and Tesla will report global EV sales this week as well.
Electric cars now account for more than half of new car sales in mainland China, as a brutal price war continues. Only two Chinese companies — BYD and Li Auto — are profitable, despite rising EV sales.
Shares of Nio rose 7.2% to 6.99 on the stock market today, sharply paring gains intraday. Nio stock has jumped more than 70% in September so far, recovering the 10-week and 40-week moving averages. That's after trading near four-year lows in August.
That surge outpaced monthly gains of 53% for XPeng, 41% for Zeekr and 34% for Li Auto, Nio's Chinese startup rivals. On Monday, XPEV stock and Zeekr reversed lower, while Li Auto slashed gains to trade back below its 200-day line.
By comparison, EV giants BYD and Tesla have jumped 17% and 21% month to date.
On Sunday, Nio said it will receive an RMB 13.3 billion (around $470 million) cash injection for its Nio China unit. It expects "strategic investors" to provide RMB 3.3 billion of that injection. Nio itself will provide the rest and will see its stake in Nio China reduced to around 88%, down from 92%, CNBC said.
The transactions are set to wrap up by year end.
Despite September's surge, Nio stock remains down around 23% in 2024 so far, as well as over the past 12 months.
Year to date, TSLA stock is up more than 4% with the Tesla robotaxi event due on Oct. 10. Shares are moving toward a 271 cup-base buy point.
BYD stock has rallied 28% in 2024. Shares cleared an early entry of 32 last week and flirted with a 13-month cup-base buy point of 36.27 on Monday.
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