Nio Hits Big Milestone As Wall Street Sees ‘Strong EV Leader In the Making’

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Nio (NIO) announced a key production milestone as Morgan Stanley turned more bullish on the electric-car maker. Nio stock rose.

Nio’s 5,000th electric vehicle of the month rolled off the production line at a Hefei manufacturing plant, the company said Thursday.

Reports in local Chinese media said that was the first time that Nio has exceeded 5,000 units per month.

The milestone comes a day after Morgan Stanley raised its earnings forecasts and price target for the so-called Tesla (TSLA) of China. The hikes were driven mainly by better-than-expected Q3 deliveries and a more visible growth outlook, the firm said.

“The pace of Nio’s progress in achieving its strategic and investment ambitions is tracking ahead of our expectations on all fronts,” Morgan Stanley analyst Tim Hsiao wrote. His research note was titled “A strong EV leader in the making.”

The firm expects China EV competition to intensify in 2021. But it believes incumbents and new entrants will struggle to replicate Nio’s diverse strategies.

“We look for Nio to reinforce its pole position through superior volume scale, good spectrum of model/market coverage, self-driving technologies and diversification into power solutions,” Hsiao said.

Notably, the analyst predicts Nio EV sales should see stronger volumes for the rest of 2020 into 2021. He cited stronger-than-expected demand and strong backlog for Nio’s EC6 electric coupe SUV, a potential rival to the Model Y.

And on Jan. 9, Hsiao expects a lower-priced fourth model to be launched at the annual Nio Day, joining the EC6 and older ES6 and ES8 electric SUVs.

He kept an overweight rating while raising his price target on Nio stock to 33 from 20.50.

Nio Stock, Electric Car Stocks

Shares of Nio rose 1.5% to 27.95 early on the stock market today. Nio stock is extended from an Aug. 25 breakout past a 15.55 buy point, meaning shares are not in buy range.

Tesla stock added 0.2% to 407 in Thursday’s premarket. Among other electric car stocks, Nikola(NKLA) gained 1.2%, Li Auto (LI) advanced 1.9% and Xpeng Motors (XPEV) gained 0.5%.

Morgan Stanley’s note comes two weeks after JPMorgan also turned more bullish on Nio stock. The firm also cited in part the EC6 backlog and the debut of a fourth model.

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