Morgan Stanley Backs NIO with Overweight Rating, Citing Aggressive Delivery Targets and New Model Pipeline
In a show of continued confidence, Morgan Stanley has reiterated its Overweight rating on Chinese electric vehicle maker NIO Inc. (NYSE: NIO), holding firm to a $7 price target. The endorsement comes after analyst Tim Hsiao met with NIO founder and CEO William Li, emerging with a reinforced bullish outlook on the company's revised strategy and growth trajectory.
"Our conversation with management underscored a more focused operational roadmap," Hsiao noted in the research update. He pointed to NIO's ambitious delivery targets—projecting 40-50% annual growth over the next two years—as a key driver. This would see the company's annual volume reach an estimated 456,000 to 489,000 vehicles by 2026.
The growth is expected to be fueled by a refreshed model lineup. New offerings like the ES9 and Onvo L80 SUVs are anticipated to capture higher market demand. Notably, the ES9, with an average selling price around ¥500,000, is projected to deliver a profit exceeding ¥100,000 per vehicle, potentially serving as a significant margin engine for NIO.
Beyond volume, Hsiao cited margin improvement from these new models and NIO's long-term investments in autonomous driving technology as pillars supporting the positive rating. The analysis acknowledges fierce competition within China's EV sector but suggests NIO's recent strategic tightening may better position it for the coming years.
NIO, ranked among the top 15 Chinese companies listed on U.S. exchanges, designs and manufactures premium smart electric vehicles, including SUVs and sedans, sold globally.
Market Voices: Analysts and Investors Weigh In
Michael Chen, Portfolio Manager at Shanghai Horizon Capital: "Morgan Stanley's reiteration is a solid vote of confidence. The delivery targets are aggressive, but if NIO can execute on its new model roll-out and achieve those margin figures, especially on the ES9, the current valuation could look very attractive."
Sarah Jennings, Independent Retail Investor: "I've been holding NIO through the volatility. This report is reassuring. It's not just hype; it points to specific, profitable models and a clearer plan. The 2026 volume target gives me a tangible milestone to watch."
David Miller, Editor at 'The Short Report' Blog: "This is classic analyst groupthink. They're rehashing an old rating while the company burns cash and the Chinese EV price war intensifies. Promising 100k profits on a model that just launched is speculative at best. Where's the concrete evidence of demand or sustainable margins? The street is being fed narratives, not numbers."
Priya Sharma, Auto Sector Analyst at GreenStreet Advisors: "The focus should be on the sequential change in management's tone. After a period of sprawling initiatives, a 'more focused' strategy, as Hsiao puts it, could be the most critical takeaway for operational efficiency and investor patience."