NIO, a Chinese electric vehicle startup, debuted Wednesday on the New York Stock Exchange.
The first of several hyped “Tesla fighters” planning to go public, NIO originally hoped to raise $3 billion from the offering, but bankers handling the deal reset the target to $1.8 billion. The IPO ended up yielding $1 billion.
There were good reasons for the early optimism. NIO’s first product, the ES8, looks, feels and performs almost as well as the head-turning Model X and Jaguar I-Pace. But trade tensions and concerns about when electric cars will be become profitable weighed down market sentiment.
So, does the lower-than-hoped-for IPO price make NIO a good buy? Or was the fledgling firm overambitious from the start?
WHAT’S TO LIKE
EV Demand. Chinese demand for EVs is expected to eclipse 1 million units this year, about half the world’s total. That number will go to 5 million by 2025, propelled by government quotas and incentives.
Massive Luxury Market. Chinese consumers will buy twice as many luxury vehicles this year as Americans. Audi, Mercedes and BMW earn close to 40% of their global profits from China.
Performance Specs. The NIO ES8 comes with formidable performance chops. Zero to 60 in 4.4 seconds, just a whisker behind Tesla. The battery range is a respectable 240 miles on a full charge. NIO has also built a network of 3-minute battery swap stations.
Technology. The ES8 also features Nomi, the dash-mounted AI assistant that responds to voice commands. From behind the wheel last month, I said: “Hey, Nomi, open the sunroof 50%.” The top window opened halfway and stopped. Impressive.
Price. The ES8 starts at $67,000. That’s about half the cost of an imported Tesla Model X (after tariffs).
Backers: Early investors in NIO include Hillhouse Capital, Sequoia Capital and Tencent—powerhouses all. Founder William Li is a self-made billionaire who grew up in a rural town in hardscrabble Anhui province. He knows how to win.
Competitors. NIO is far ahead of where Tesla stood after its first four years. But Tesla enjoyed a grace period of zero competition in the EV arena. German automakers (and other Chinese EV startups) are preparing their own stunning new products for market launches in the coming months.
Scaling Up. Will NIO be able to rapidly increase production and sales? Tesla’s painful experience at the Fremont, California, plant no doubt keeps NIO leaders awake at night. Then there is the sales challenge. NIO is going with a direct-to-mobile approach in lieu of dealers, which is unprecedented in the industry.
Allure: NIO is doing many smart and inventive things to build the brand, including its flagship NIO Houses in Shanghai and Beijing. Will they be compelling enough to win over Chinese buyers who love their BMWs, Mercedes and Audis?
WIN, PLACE OR (JUST) SHOW?
Some market commentators have recently been quite critical of NIO, suggesting that the company is heavy on “show” and light on substance. With any startup, there is always a place for healthy skepticism. But NIO has developed a remarkably competitive vehicle, replete with world-class technologies.
What rightly gives pause to investors is the needling question of how soon makers of electric cars can make a profit. Steadily declining battery prices suggest that day is coming sooner rather than later. This makes NIO look a little bit like a buy-low-now and sell-high-later opportunity.
The risks are there for sure. But as Clint Eastwood says: “If you want a guaranteed thing, buy a toaster.”
Waze launches nationwide carpool app
Waze, the crowd-sourced navigation app that helps its users avoid traffic jams and speed traps, has launched a carpooling app. The Google-owned company says Waze Carpool, which went live across the country today, could one day cut down on traffic.
Finding that most people want to carpool with people they know, Waze built the service to provide an introduction. Users, who must provide a validated work email to register, gain access to Facebook and LinkedIn profiles, give one another reviews and can set up filters based on preferences.
A woman could decide to ride only with other women, for instance. Users also can block people they don’t want to ride with.
Asked about safety issues at the app’s unveiling at Google’s New York headquarters today, Waze CEO Noam Bardin noted that new technology platforms are increasingly allowing strangers to interact.
“If 10 years ago someone would say [they’re] going to sleep in a stranger’s house on vacation, you would have thought it unbelievable,” he said. “Things do happen. … But think about the millions of people using Airbnb every day—and cooperating.”
Waze Carpool also has been built in a way that prevents a user from turning it into a business. It accommodates only two rides per day. And while it facilitates small payments between riders and drivers to cover the cost of gas, they are set at 54 cents a mile, the limit the IRS will accept as a tax deduction.
Because the vehicle is not being used for a business, the driver’s personal car insurance is all the coverage that’s required.
Waze, founded in Israel and acquired by Google five years ago, envisions the app being used in partnership with municipalities looking to fight congestion and with businesses that want to help employees with their commute.
Bardin said he could imagine a scenario in which carpooling New Yorkers get a break on tolls or the app is used for access to HOV lanes on Brooklyn to Manhattan bridges once the L line shuts down.
For now Waze is not charging for the service and is subsidizing new riders by limiting their fuel-reimbursement cost to $2 a ride for their first three weeks. But Bardin said he expected the company would take a slice of each transaction once the app is used widely enough.
Public School Debuts NYC Taxi Cab-Inspired Mi Electric Scooter
Following an upcycled collection with Nike, Levi’s, Alpha Industries and more, Public School delivers another standout collab, this time with Chinese electronics company Xiaomi, and utilizing the brand’s Mi Electric Scooter.
Evoking Public School’s signature aesthetics, the hi-tech scooter boasts a minimal design with its dark grey/anthracite palette, and highlighted with a checkerboard pattern gracing the frontal tube, along with PSNY branding in contrasting white, and bright red utilized for the scooter’s brake and wheel wiring system.
“We reimagined the Mi Electric Scooter with inspiration from New York City taxi cabs. We are excited for the world to see our take on a scooter we use daily,” said Maxwell Osborne and Dao-Yi Chow of Public School.
Priced at $795 USD, you can purchase this limited edition scooter exclusively at Public School’s new flagship located at 3 Howard Street in New York City, as well as online, beginning October 6.
Flying taxi to travel from Boston to New York in 36 minutes
A private transportation company seeks to offer a new form of travel connecting Boston and New York in under an hour.
Boston-based Transcend Air Corporation is developing the Vy 400, a six-seat, vertical take-off and landing aircraft. “It takes off and lands straight up and down,” the company said of the aircraft’s design. “This means we don’t need runways and airports. We’re able to depart and arrive right in major city centers.”
The company says the prototype can travel more than 400 miles per hour – three times faster than traditional helicopters – cost less to operate and offers a quieter ride than a helicopter.
“The Vy will provide faster, more affordable door-to-door service than either helicopters or conventional airplanes, without the need for airports,” the company said in a statement. “Transcend will deliver service right from major city centers, such as Manhattan and downtown Boston, using VTOL-ready landing pads.”
The company plans to launch commuter services between multiple North American cities in early 2024. Current planned services include: flights connecting New York City and Boston in as little as 36 minutes; Los Angeles and San Francisco in 55 minutes; and Montreal and Toronto in 25 minutes.
Announced prices are comparable to commercial flights between cities: $283 to-and-from Boston; $315 for West Coast flights; and $325 for Canadian travel.
Transcend Air says they hope to expand to dozens more cities in later years.
“This is a necessary and transformative addition to city-to-city transportation options,” Greg Bruell, co-founder and CEO of Transcend said. “It solves multiple problems at once: we’ll take cars off congested roads, reduce pollution around airports, and lower the cost of air transportation while drastically reducing travel times.”
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