Chinese automaker NIO (NIO) remains a ‘Buy’ at Morgan Stanley, following a recent meeting with the company’s founder, William Li. In a new report, top Morgan Stanley analyst Tim Hsiao reiterated his Overweight rating on the stock and maintained a $7.00 price target, citing strong delivery growth plans, margin upside from new models, and long-term potential in autonomous driving.
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While NIO continues to face intense competition in China’s EV market, Hsiao believes management’s updated strategy points to a clearer growth path over the next few years.
Analyst Highlights Growth, Margins, and Long-Term Tech Upside
Hsiao said NIO’s founder expects deliveries to grow at a 40%–50% annual rate over the next two years, implying 456,000 to 489,000 vehicles in 2026, driven by new models such as the ES9, ES7, and Onvo L80.
He added that the ES9 should be a key margin driver, with an average selling price above RMB500,000 and a potential profit of more than RMB100,000 per vehicle, positioning it against premium SUVs like the BMW X5, Mercedes GLE, and AITO M9.
Hsiao also pointed to NIO’s plans to expand the Onvo brand with two to three models priced between RMB150,000 and RMB200,000, targeting 8%–10% market share. He said the company’s battery-as-a-service (BaaS) plan could help reach buyers below RMB150,000, while noting that brand awareness and sales execution remain near-term priorities.
Finally, Hsiao said NIO is focused on getting back to a leading position in self-driving. The company is using its own models and Shenji chips to build the technology, which he believes could support software revenue over time.
Is Nio a Buy, Sell, or Hold?
Overall, Wall Street has a Hold consensus rating on NIO stock based on two Buys, three Holds, and one Sell assigned in the last three months. The average NIO stock price target of $6.03 implies 30.80% upside potential from current levels.
