Morgan Stanley Reiterates Overweight Rating and $7.00 Price Target on NIO

Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating and $7.00 price target on NIO (NYSE: NIO).

“NIO’s founder reiterated that deliveries can achieve a 40-50% CAGR over the next two years, implying 456-489k units in 2026, underpinned by new models, including ES9, ES7, and Onvo L80.

Management said the ES9 would be key to higher margins, potentially exceeding Rmb100k profit per unit, given its high ASP above Rmb500k, which would enable it to compete against models like BMW X5, Mercedes GLE, and AITO M9.

NIO plans to roll out 2-3 Onvo models in the Rmb150-200k segment in the long run, as it aims to achieve 8-10% market share in the segment.

With BAAS subscription, management believes it can reach potential customers in the subRmb150k segment.

Mr Li also highlighted that enhancing the brand awareness and sales efficiency of Onvo remains critical near term.

NIO remains committed to regaining pole position in the China autonomous driving (AD) space, where it will continue to leverage its in-house developed World Model, reinforcement learning model, and Shenji chips.

Mr Li said he is optimistic that NIO can monetize its AD software in the long run. NIO is also exploring the opportunity to sell its AD chips externally.”

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