NIO Inc. surged nearly 10 per cent on June 28th, the third anniversary of NIO Power. For investors who are still mocking NIO Inc., it seems to be a bit lonely.

There is no doubt that the biggest attraction of NIO Inc. Automobile is that it initiated the energy network revolution represented by NIO Power. Although it has not yet made a profit, it still does not stop the overseas fund bosses from shouting that NIO Inc. will overtake Tesla, Inc. to become China's largest electric car manufacturer.

In short, NIO Inc., as the main designer and manufacturer of high-tech electric vehicles in China, is still moving forward and will still be questioned.

There is great potential for changing power stations.

NIO Power is NIO Inc. 's first energy service system in the world. In essence, as China and the world enter the electrified era, this will make NIO the largest "gas station" company of electric vehicles in China.

Through a recent partnership with China Petroleum & Chemical Corp, NIO has begun building infrastructure for the business-hoping to build a network of 5000 battery switching stations by 2024.

This will give NIO a decisive networking advantage in this area, meaning it is beginning to take off in the world's largest market for electric vehicles, enabling it to build partnerships with other domestic carmakers and drive strong revenue growth in this business.

According to the news, as part of its expansion strategy, NIO Inc. recently announced that it has built 284 exchange power stations in China. According to the manufacturer's plan, NIO Inc. will continue to rapidly promote the construction of the second generation of exchange power stations and strive to achieve the goal of building a total of 500 exchange stations by 2021 as soon as possible.

NIO Inc. already holds hundreds of patents on battery switching technology and seems to have the intellectual property moat necessary to turn this potential into reality-it seems only a matter of time before it is implemented and expanded.

Located at the high end, sales are still rising steadily.

According to a recent set of data, by the end of March 2021, NIO Inc. had accumulated more than 4200 patents and patent applications worldwide, covering complete vehicle manufacturing and design, three electricity technology, power exchange and charging technology, self-driving technology, digital cockpit technology, vehicle networking technology and other fields.

NIO also has a strong foothold in self-driving technology, applying for nearly 50 patents in this field alone, and is proud of its AI-powered intelligent "cockpit".

Although located at the high end, NIO Inc. 's product sales are still rising steadily. Data show that in May, NIO Inc. delivered a total of 6711 units, an increase of 95.3% over the same period last year. In June, NIO Inc. will continue to speed up delivery actions, while ensuring that the planned delivery volume of 21000 to 22000 units will be reached in the second quarter. the cumulative delivery of the brand will also officially exceed 110000.

It is worth mentioning that NIO Inc. announced the Norwegian strategy on May 6: as NIO Inc. 's first step in entering the market outside China, NIO Inc. will establish a direct sales and service network in Norway. NIO House, European version of App, exchange station, NIO Life and so on will be met with Norwegian users one after another.

Once Norway is formed on a large scale, it means that NIO Inc. will further infiltrate into other European markets. There is no doubt that, on all sides, Europe seems to be a more logical choice for NIO Inc. to start global expansion.

Overseas analyst: trillion valuation is just around the corner!

With regard to the forecast of electric vehicle sales, industry data show that global electric vehicle sales will soar to 60 million by 2040. Not only that, demand for batteries and battery charging infrastructure will also soar.

Seeking alpha analysts boldly predict that if NIO can seize its early leadership in China's electric vehicle and battery charging infrastructure business and successfully expand its business internationally, then NIO must be valued at $1,000bn by 2040.

The market expects NIO Inc. 's BaaS business to also have higher profit margins, and given that it can be fully automated, the actual model is leasing rather than owning, in order to free up money for high-return investments elsewhere, the analyst said. It is entirely feasible to achieve a gross profit margin of 25 per cent and a net profit margin of 15 per cent by 2040.

At present, the market expects NIO Inc. 's gross profit margin to be close to 20% in 2021 and 2022, while TSLA's current gross profit margin and net profit margin are 23% and 11.5%, respectively.

If NIO accounts for 7.5 per cent of the global electric vehicle market by 2040 (TSLA currently stands at 11 per cent), it will sell about 4.5 million vehicles a year. Given that the majority of electric vehicle sales are expected to be in China, benefiting from government support and good sales channels, this share is also more likely to be achieved.

If the average price of an electric car is $40, 000, it will make a profit of about $6000 per car and an annual profit of $27 billion from car sales alone. At 30 times earnings, that would value the car business at $810 billion.

At the same time, within the scope of its business in China, each car could generate a profit of $150 a year. It is estimated that by 2030, China will have 50 million electric vehicles on the road, accounting for 40 per cent of total car sales. A very conservative estimate is that the number of electric vehicles on China's roads will double to 100 million by 2040.

If NIO's BaaS business serves 20 per cent of China's electric vehicles by 2040, that would be equivalent to an increase in annual net income of more than $3bn. Apply 30 times earnings again, which would be equivalent to a market valuation of about $100 billion.

At the same time, NIO Inc. has great potential to use his data and autonomous driving technology as well as huge BaaS infrastructure to launch an autonomous taxi service network. So far, the size and capability of NIO in a potentially huge market like China will value the business at $100 billion.

Overseas analysts combined the three businesses and gave the possibility of a trillion-yuan valuation.

According to the morning news on June 29th, Louis Navellier, chief investment officer of fund management company Navellier, also said that Chinese electric car maker NIO Inc. will overtake Tesla, Inc. to become the largest electric vehicle company in China.