U.S.-listed shares of Chinese electric vehicle maker Nio extended the rally in pre-market trading on Monday after Morgan Stanley said pre-orders for the company’s newly revamped ES8 SUV may have exceeded 30,000 units in the first few days.
Morgan Stanley analyst Tim Hsiao reiterated an ‘Overweight’ rating and a $6.50 price target on Nio.
Last week, the firm had increased its price target on the Shanghai-headquartered EV maker by 10%.
In a new research note sent out on Monday obtained by PriceTarget, Hsiao noted that the stock has already risen more than 90% from its June trough, far outpacing the 9% gain of Hong Kong’s Hang Seng Index.
The analyst said the firm’s checks suggest ES8 pre-orders, placed with a 5,000 yuan refundable deposit, may have surpassed 30,000 and continued to increase.
While real demand will depend on order conversion, Hsiao added that constructive feedback is reinforcing the market’s belief that the model could “go viral” as Onvo’s L90 SUV did last month, potentially supporting a monthly run rate of 40,000 to 50,000 vehicles for Nio Group from October.
Hsiao also pointed to what he described as “benign fund flow,” with Nio’s trading value climbing above $2.5 billion in the past two sessions, equivalent to the cumulative value of the prior two weeks.
Investor sentiment has also shifted, he said, with a “sharp decline in client enquiries on Nio’s underlying demand and execution risk” and increased attention to the upcoming L60 and L80 facelifts, both expected early next year.
The L60 was launched in May 2024 with deliveries beginning in September. The L80, which is the five-seat version of the L90 SUV, is reportedly planned to be unveiled in the fourth quarter.
Despite a strong start, the L60 model suffered significant order cancellations in the final weeks of last year, leading to several missed sales targets in the first months of 2025.
The brand had planned to deliver 16,000 units in January and 20,000 in March but figures stood well below those targets. Onvo delivered 5,912 L60s in January and 4,820 in March.
According to the note, the stock’s upward movement has become self-reinforcing as investors believe Nio’s share price is correlated with capital markets’ willingness to finance its operations and strategic ambitions, which in turn is tied to the company’s ability to navigate an accelerating auto industry shakeup.
As of press time, Nio’s U.S.-listed stock was trading 5.3% higher at $6.68 in Monday’s pre-market session.
The company said earlier Monday that its annual event, where the ES8 will be officially revealed, will take place in Hangzhou in late September, though it did not provide a specific date.
Over the weekend, an internal message from Nio’s head of Sales Bruce Yang was circulated on Chinese social media, warning sales staff about a series of upcoming rival launches and urging them to avoid “mistakes or missteps.”
Yang thanked employees for their increased workload since the pre-launch of the Onvo L90 model in early July.
The company has seen a sharp increase in store traffic in recent weeks after unveiling two new three-row SUVs: the L90 under the Onvo sub-brand and the third-generation ES8 under the core Nio brand.
Nio began pre-sales of the revamped ES8 last Thursday, surprising the market with a lower-than-expected entry price for the premium model.
Deutsche Bank raised its price target for Nio’s Hong Kong-listed shares on Friday, citing competitive pricing and the company’s focus on developing a large three-row SUV.
