No two ways about it, Nio (NIO) stock has been in a rut and unable to shake off the bearish sentiment. Shares are down 25% over the past month alone, due to a combination of factors, including the fear of US delisting for Chinese stocks and a generally tough environment for growth names.
However, the company might have an ace up its sleeve which could help turn sentiment around. On Saturday (Dec 18), the EV maker will host its fifth annual NIO Day.
At least one new model will be unveiled, the ET5 mid-size sedan (the company’s 5th model), which Deutsche Bank’s Edison Yu thinks will be NIO’s “highest volume vehicle thus far.” Its starting price should be in the low 300,000 RMB ($46,000) range and similar to the Tesla Model 3, BMW 3 series and Audi A4, the model will cater to the mid-size premium segment.
The vehicle will be the first to be manufactured at the NEO Park – NIO’s second plant – and Yu believes production will begin by the end of 3Q22. The analyst expects just 9,000 units will be delivered next year but this will rise to 65,000 in 2023E.
While Yu was also anticipating another model to be revealed, recent social media posts and comments from the company suggest the 6th vehicle in the line-up may get its introduction at a different event further down the line. “To be clear though,” the analyst said, “The company still very much plans to deliver this vehicle in 2H22.”
There should also be more info regarding the “flagship” ET7 sedan, all set for a 1Q22 launch. “We suspect the company will provide a range performance boost compared to previously stated 311 miles (using 75 kWh battery pack) and incremental details about the higher level ADAS capabilities of its next-gen NAD system,” Yu said. The analyst believes this model will “sell very well” and estimates there could already be 50-60,000 units in the order book.
Elsewhere, there should also be updates on the 150 kWh hybrid solid state battery, which is set to launch in 4Q22 and more info regarding next-gen autonomous driving capabilities and the expansion into the Europe market.
To this end, Yu expects the stock to push much higher over the coming months. The Deutsche Bank analyst rates NIO a Buy, and his $70 price target suggests ~141% upside potential. (To watch Yu’s track record, click here)
The rest of the Street shares a similar outlook. The analyst consensus rates the stock a Strong Buy, based on 8 Buys vs. 1 Hold. There’s plenty of gains projected too; shares are expected to rise ~108%, considering the one-year average target stands at $60.67. (See Nio stock forecast on TipRanks)