BoA Bullish on Nio Inc. After Meeting with Management

By Michael Elkins

Shares of Nio Inc. (NYSE:) are down almost 2% in premarket trading Monday after the company held management talks with Bank of America Securities analysts.

Bank of America hosted NIO’s management post 2Q , where the company saw a gross profit margin trough in 2Q22 and expects margin to gradually improve on a QoQ basis on better product mix. As for non-vehicle-sales business, according to a note by an analyst, “management believes that the loss is mainly due to fast expansion of charging infrastructure and expects margin to improve in 2H22 as more cars are sold.”

Bank of America Securities and the analyst reiterated a Buy rating and $30 price target on NIO due to the carmaker’s strong model pipelines and improving GPM.

Management indicated in the meeting that ET5 order intake is strong. Stronger than previous models, and NIO is seeing a different customer profile with more female and younger consumers. The company expects orders intake to be further improved after it begins ET5 test drives. NIO will start delivery of ET5 on September 30th and is targeting over 10,000 units delivered in December.

Regarding the low yield rate of mega-casting parts, NIO has sent engineers to solve the problem and expects the issues to be solved by the end of October. As for fast-charging technology, NIO has finished the development of 480kW charging piles, and plans to install them by end-2022. In addition, NIO will launch models equipped with 800-voltage fast-charging features in 2024.

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