Morgan Stanley Reiterates Nio’s $9.00 Price Target
Morgan Stanley analyst Tim Hsiao reiterated on November 25, 2025, an ‘Overweight’ rating and $9.00 price target on Nio.
“NIO reported a narrowing net loss of Rmb3.7bn in 3Q25 (vs. Rmb5.1bn in 2Q25), better than MSe of an Rmb4.3bn loss thanks to better GpM.
Vehicle revenue grew 19% QoQ on the back of 21% QoQ volume growth, implying a mild sequential ASP decline. Non-vehicle revenue fell 10% QoQ.
Vehicle gross margin edged up 4.4ppt QoQ to 14.7% (vs. MSe 13%), likely as scale benefits and higher margins of new launches (Onvo L90/NIO ES8) offset ongoing promotions.
Overall GPM grew 3.9ppt QoQ to 13.9%, above MSe of 10.9%.
Opex fell 4% QoQ following restructuring efforts, where R&D fell 20% QoQ and SG&A grew 6% QoQ from new model launches.
NIO’s cash balance (including restricted cash, short-term investments, and long-term deposits) grew Rmb9.5bn QoQ, to Rmb36.7bn.
NIO guided 120-125k for 4Q volume, (vs. MSe of 150k) implying an average of 40- 42k in Nov/Dec vs. 40k in October.
Revenue guidance of Rmb32.8-34.0bn (up 50- 56% QoQ) suggests a high single digit sequential ASP expansion in 4Q, likely reflecting a higher mix of ES8/Onvo L90 sales.
NIO plans to launch three new large-size SUVs – NIO ES9, ES7, and Onvo L80 – in 2Q-3Q26 to support higher volume growth in 2026.
Management targets 20% GPM in 2026 on the back of supply chain cost savings, scale, and a favorable product mix.
As NIO ES6, EC6, and ES8 all come with 20%+ GPM, management is confident it can maintain its group GPM target even if promotions widen slightly amid potential demand headwinds.
NIO aims to keep R&D contained at Rmb2bn per quarter and SG&A at 10% of total revenue in 2026, which could enable a non-GAAP profit breakeven year.
The company sees limited impact from the 5% NEV purchase tax hike in 2026 as high-end consumers choosing the BaaS option will not be taxed on the battery rental portion of the vehicle price.
Hence, management expects a milder QoQ volume decline in 1Q26 vs. 1Q25.
What’s next?
After NIO’s management laid out the path to profit breakeven in 4Q25 and 2026, investors will likely monitor the order backlog/delivery ramp-up of NIO ES8 and Onvo L90 closely, as well as upcoming launches that are crucial to scaling revenue and margin expansion into a volatile 2026 amid the NEV purchase tax hike and fading subsidies.”
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