Written by Cláudio Afonso | LinkedIn | X
JP Morgan analyst Nick Lai released Tuesday a new research note on the electric vehicle maker Nio after visiting several stores of the sub-brand Onvo in Shanghai, China.
Citing confidence in the sales momentum of Onvo’s debut model, JP Morgan reiterated the Overweight rating and $8.00 price target on the Nio stock indicating an upside potential of 51.5 per cent based on Monday’s closing price.
In the new note, the analyst said the company launched the L60 with a “competitive starting price of 149,900 yuan” when bought with the battery subscription program.
“Nio officially launched its first SUV under mass-market brand Onvo on September 19 at a competitive starting price of Rmb149.9K (with battery leasing option),” Lai wrote before sharing his learnings after three different Onvo stores in Shanghai.
The analyst spoke with “several salespeople” and potential buyers who “enhanced” JP Morgan’s confidence in the success of the Onvo L60.
“To gauge the potential underlying demand and customer profile, we visited three major Onvo stores in Shanghai in the past few days and managed to speak to several salespeople at the showrooms as well as potential buyers,” the analyst said.
“Briefly, our visits enhance our confidence in Onvo’s sales momentum and its successful product positioning,” he added.
On Monday, an official spokesperson wrote, “Since the release on September 19, the number of L60 orders has far exceeded expectations” adding that efforts are being made to “meet the demand for customers.”
According to what the brand’s official app showed on Monday, the waiting time for Onvo L60 deliveries stands at 8 to 12 weeks (two to three months).
After Nio reported its earnings results from the second quarter, JPMorgan upgraded the stock’s rating to Overweight due to cash flow improvement and strong sales expectations for the Onvo model.
“This underpins our recent upgrade of Nio to OW (click here) after its 2Q24 results on expectations that 1) Nio’s cash flow condition will continue to improve with 4Q24 operating cash flow likely turning positive,” Lai wrote before comparing the SUV sales of Tesla and Onvo.
Nio Senior VP and Onvo’s President, Alan Ai, wrote on the app Monday that Nio and Onvo held a supplier conference last week with over 1,000 supply chain partners where they were asked to “increase shifts and improve production planning.”
Additionally, the analyst also expects the “monthly sales run rate of L60 should reach around 30-40 per cent of Tesla Model Y’s, or ~10-15K units in 2025, which if it materializes, would be a strong fundamental driver for Nio’s financial and operation performance.”
Nio management said after the event that expects to deliver 5,000 units in October with a continuous production ramp-up. Nio Group founder and CEO said the goal for March 2025 is to deliver 20,000 L60 units.
Nio management said after the event that expects to deliver 5,000 units in October with a continuous production ramp-up. Nio Group founder and CEO said the goal for March 2025 is to deliver 20,000 L60 units.
Written by Cláudio Afonso | LinkedIn | X
Never miss an update
The post JP Morgan Reiterates Bullish Take on Nio After Visiting Onvo Stores first appeared on EV.