Written by Cláudio Afonso | LinkedIn | X
JP Morgan downgraded electric vehicle maker Nio to Neutral from Overweight and slashed its price target by 33% to $4.70, citing cuts on the firm’s estimates for revenue and earnings.
Analyst Nick Lai said in a research note on Tuesday that the bank expects Nio to deliver 24% fewer vehicles than the company’s latest guidance of about 440,000 units. Despite that, the analyst still expects this year’s vehicle deliveries to grow by 50% from 2024.
Nio’s deliveries rose 38.7% in 2024 to 221,970 units. However, sales of its first/ cheaper sub-brand, Onvo, began only days before the fourth quarter.
The company launched its second sub-brand, Firefly, last December and deliveries in China are expected to start in late April 2025, Goldman Sachs recently revealed, adding that Nio expects to reach 50,000 units this year. Nio is banking on both sub-brands to help double its annual sales to about 440,000 units.
JP Morgan’s revised price target suggests a nearly 10% upside from Monday’s closing price of $4.28, significantly lower than the 63% potential gain implied by the previous $7 target. Year to date, the stock has lost less than 2%.
“In 2025, one of our theses is earnings delivery will again play an integral role in the stock’s performance,” the analyst wrote in a new research note. JP Morgan has cut both revenue and earnings estimates for this year and 2026.
Nio announced last week new purchase incentives for customers who place a deposit on a Nio-branded vehicle in February. New buyers will be eligible for a financing program requiring a minimum 20% down payment and offering 0% interest for up to five years.
“We revise down our FY25-26 [full year 2025-2026] revenue and earnings estimates by 7-10%/13% and our new estimates are similar to street forecasts. Our full year volume estimate is 334k units this year, up 50% from 2024,” he wrote.
Commenting on sales estimates, the firm says its “volume assumption is shy of mgmt’s 2025 target of doubling sales from 2024 to about 440k units.” Lai added that JP Morgan “will monitor closely Nio’s monthly sales run rate as well as order flow. We rate the stock Neutral.”
Shanghai-based EV maker Nio delivered 13,863 electric vehicles in January, the company said last weekend.
Although the group’s deliveries rose 37.9% year-on-year, the increase was driven by the lower-cost sub-brand Onvo, while Nio-branded deliveries fell 21% from 10,055 in January 2024 to 7,951 units.
The January figures come after a record-breaking December, when the group delivered 31,138 vehicles, typically the strongest month for the automotive industry due to year-end sales promotions.
As confirmed by Nio’s chief executive, the company’s third EV manufacturing plant is planned to begin production in the third quarter of this year. The factory is located in Huainan, Hefei, where Nio’s two existing factories are also situated.
