By Michael Elkins
A Bank of America Securities analyst reiterated a Buy rating and raised their price target on Nio Inc. (NYSE:NIO) to $30 from $29 following positive feedback from consumers on the ET5.
The analyst wrote in the note, “We prefer NIO given its good product cycle and comprehensive EV portfolio. Our checks show that after NIO launched ES7 (mid-large size SUV), total orders on ES8/ES6/EC6 did not slow down much. The launch of ET7 and ET5 also have different addressable markets given differentiated car size and price. In our view, NIO’s volume growth trend should be stronger than Xpeng and Li in the next few quarters as most of its EV products are new, and new generation of ES8/ES6/EC6 will be launched in 2023 to sustain demand.”
NIO started to accept “non-refundable orders” last week. Channel checks suggest that besides family-use consumers, more female consumers and first-time EV buyers have placed “non- refundable orders” in the past few days. However, NIO is currently facing a casting part shortage on ET7/EC6 and this has capped its car deliveries in 3Q22.
Management indicated that it will have five casting part suppliers soon and more capacity will be added starting mid-October to meet consumer demand.
Shares of NIO are up 1.72% in Pre-market trading on Monday.