Nio’s 5,000th electric vehicle of the month rolled off the production line at a manufacturing facility in Hefei, the company said Thursday.Reports in local Chinese media said it was the first time that Nio exceeded 5,000 units per month.
The milestone comes a day after Morgan Stanley raised its earnings forecast and price target for the so-called Tesla (TSLA) from China. The increases were primarily driven by better-than-expected deliveries in Q3 and more visible growth prospects, the company said.
“The pace of Nio’s progress in achieving its strategic and investment ambitions exceeds our expectations on all fronts,” wrote Tim Hsiao, analyst at Morgan Stanley. His research note was titled “An EV Leader in the Making”.
The company expects Chinese electric vehicle competition to intensify in 2021. But it believes incumbents and new entrants will find it difficult to replicate Nio’s various strategies.
“We are looking for Nio to strengthen its pole position through higher volume scale, good model spectrum / market coverage, autonomous driving technologies and diversification into power solutions,” said Hsiao.
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Notably, the analyst predicts that Nio EV sales are expected to see higher volumes for the remainder of 2020 through 2021. He cited stronger-than-expected demand and a strong order book for the EC6 electric coupe SUV from Nio, a potential rival to the Tesla Model Y. in China, the Model Y is expected to start deliveries in early 2021.
And on January 9, Hsiao expects a cheaper fourth model to launch at the annual Nio Day, joining the EC6 electric SUVs and the older ES6 and ES8 electric SUVs. There have been some images of a Nio sedan that could comp
He maintained an overweight rating while raising his target price on the Nio share to 33 from 20.50.
Nio Stock, Electric Car Stocks
Shares of Nio jumped 16% to 31.81 in the stock market today, hitting a record high. Nio stock is extended from a breakout of August 25 to a buy point of 15.55, which means the stocks are not in the buy range.
Li Auto (LI) rose 12% to 20.93, near a buy point of 21.96. Xpeng Engines (XPEV) gained 8.2%. The two stocks of electric cars in China went public this summer. WORLD (BYDDF), a Chinese electric vehicle and battery maker that trades over-the-counter in the United States, jumped 12.5% to 20.78, a new high.
Tesla stock rose 1.9% to 413.90, slightly below its 50-day moving average. Among other stocks of electric cars, Nikola (NKLA) gained 1.1%.
Morgan Stanley’s note comes two weeks after JPMorgan also became more bullish on Nio stock. The firm also cited in part the EC6 backlog and the launch of a fourth model.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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