With Nio (NIO) stock coming under almost constant pressure in 2021 (down 42% YTD), the company’s NIO Day – which took place on Saturday – had been noted as a possible catalyst to finally kick a turnaround into action.
As expected, at the event, the company announced the ET7 model’s launch. Deliveries will start on March 28th; Morgan Stanley’s Tim Hsiao says the announcement will help to “alleviate investor concerns” over delayed deliveries due to supply bottlenecks.
However, of more importance, was the unveiling of another model, the ET5 midsize sedan, with deliveries due to start next September. Before NEV subsidies, prices for the new model will start at Rmb328,000 for the 75kwh version and Rmb386,000 for the 100kwh version, compared to the ET7 at Rmb448,000. The ET5 also comes with the Battery-as-a-Service (BaaS) option, which lowers the vehicle’s price to Rmb258,000.
The entire ET5 lineup will come equipped with NIO Aquila Super Sensing and NIO Adam Super Computing features. These will “empower” the most recent version of NIO Autonomous Driving (NAD). “Overall,” says Hsiao, “A favorable combination of range, interior room, tech features and value makes the ET5 an appealing choice among EV and ICE options alike.”
Other highlights from the event include the introduction of the “panoramic digital cockpit, ‘PanoCinema.’” This futuristic element will provide the ET5 with AR/VR capabilities and “further extends in-car-infotainment applications for smart vehicles.” As part of a collaboration with NREAL/NOLO, NIO also intends on launching AR/VR glasses. Although Hsiao says these initiatives might appear to be “minor at the moment, these rapid tech innovations once again manifest the difference” between EV startups and traditional OEMs.
But will the developments be enough to mark a change in sentiment for this beaten down EV stock? While Hsiao believes the ET5’s unveiling should boost “market sentiment,” he is not sure it is enough for now.
“We think the stock’s risk-reward is attractive,” the analyst summed up, “But it may take more positive catalysts regarding NIO’s monthly sales resurgence, face-lifts of existing models and an operational breakthrough in the next few months to send the stock higher, as investor expectations were raised ahead of Nio Day.”
Hsiao, however, remains a fully-fledged NIO bull, as evidenced by his Overweight (i.e. Buy) rating and $66 price target. Investors could be sitting on gains of 136%, should Hsiao’s forecast play out next year. (To watch Hsiao’s track record, click here)
Morgan Stanley’s take is not an unusual one on Wall Street; based on 7 additional Buys and 1 lone Hold, the stock boasts a Strong Buy consensus rating. Moreover, the $60 average target implies the shares will be changing hands for a 110% premium a year from now. (See Nio stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
