Citi Reaffirms ‘Buy’ Rating on Nio
Citi analyst Jeff Chung reiterated on December 3, 2024, a ‘Buy’ rating on Nio, with a $8.90 price target.
“Group-Level Breakeven Target for 2026 — Mgmt. targets group-level breakeven in 2026, supported by
- Nio brand reaching monthly sales of 25k units with an ASP of Rmb350k and a GPM of 20%,
- Onvo brand achieving monthly sales of 35-45k units with an ASP of Rmb220-250k and a GPM of 15%, and
- limiting R&D growth to less than +10% YoY and controlling SG&A expenses in 2026. 2025E Sales Targets – Nio brand aims for a 10-20% YoY sales increase in 2025.
For Onvo, L60 model is expected to achieve 10k units in Dec-24E and 20k units in Mar-25E.
Onvo’s monthly sales are expected to reach 30-50k units after the launch of 2 new SUVs in 2H25E.
Nio Brand — Mgmt. indicates that next-gen Nio models launching in 2025 will feature lower pricing and higher GPM, with GPM growth primarily due to
- the adoption of self-developed chips (costs reduced by Rmb10k per car compared to using 4 NVIDIA Orin chips), and
- partial adoption of Onvo suppliers to further reduce costs.
Onvo’s GPM — Mgmt. expects Onvo’s GPM to exceed 10% in Mar-25E and reach 15% in Dec-25E.
Onvo’s ADAS hardware cost — Per mgmt., the ADAS hardware cost per car of Onvo brand is slightly higher than Rmb10k.
Onvo battery supply constraints — Per mgmt., Onvo’s previous production bottleneck was caused by BYD battery supply limitations (5-6k units/month).
From Dec-24, CATL will start supplying batteries with an initial capacity of 6-8k units/month, which is expected to ramp up to 14k units/month.
Onvo’s Infrastructure Expansion — Onvo currently operates over 100 stores, with plans to expand to 500 stores by mid-2025.
Battery swap station capacity will increase from the current 600 stations to 1k by Mar-25E and 1.5k by Jun-25E.”
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