Morgan Stanley reiterated its bullish stance on Nio following the unveiling of the Onvo L90, the second model under the EV maker’s mass-market sub-brand.
Analyst Tim Hsiao maintained an Overweight rating and a $5.90 price target on the stock, implying a 70% upside from the previous closing price.
“Nio unveiled the Onvo L90 today at a pre-sale price of Rmb279,900 [$39,010], or Rmb193,900 [$27,020] for the BaaS (battery-as-a-service) option,” Hsiao wrote in a note published Thursday.
The analyst added that “the official pricing will likely come in below market expectations of Rmb270,000–280,000 [$37,800–$39,020].”
The L90, a large family SUV, will be offered in six- and seven-seat versions. A five-seat variant — planned to be named the L80 — is scheduled for the fourth quarter.
The official launch of the L90 is set for the end of July, with nationwide deliveries beginning on the first day of August.
The vehicle features 900V fast charging, air suspension, an Augmented Reality Head-Up Display (AR-HUD), a smart refrigerator, and Level 2+ assisted driving capabilities powered by Nvidia’s Orin-X and a vision-only sensor suite.
Hsiao said the model’s specifications and cabin space compare favourably with larger six-seat SUVs such as the Li Auto L9, Aito M9, Lynk 900, and Denza N9, while its pricing aligns more closely with sub 300,000 yuan models including the Li Auto L6, Aito M7, XPeng G9, Wey Lanshan, and Xiaomi SU7.
“Could aggressive specs/pricing remedy unproven branding/execution?” Hsiao asked. “L90’s interior space and specs are fairly competitive… albeit with a much more competitive price.”
Nio is targeting monthly Onvo sales of 25,000 units by the fourth quarter.
The sub-brand registered 6,400 vehicles in June — its highest monthly total this year, and second only to its September 2024 debut.
Hsiao said the brand has an “unsatisfactory track record of execution and inferior brand awareness” when compared to its competitors.
“Although we strongly recognize Onvo L90’s advantages in the crowded race, beating market expectations isn’t without challenges considering Onvo’s unsatisfactory track record of execution and inferior brand awareness, which require extra effort for Onvo to leverage L90 and upcoming L80 to overcome the deficit,” Hsiao wrote.
A year ago, the company began deploying its fourth-generation battery swap stations in China, which support up to 480 swaps per day and feature a 23-pack battery capacity. Swaps take 144 seconds—22% faster than the previous generation.
Prototypes of the fifth-generation station will be completed by the end of the third quarter, after which the company will move to reliability validation and production readiness, co-founder and president Qin Lihong said at a media roundtable in Hefei on Friday.
Nio has also brought forward its annual launch event—typically held in December or January — to late September, where it will unveil a refreshed version of its ES8 SUV.
Earlier this week, the company raised the registered capital of two of its core Chinese subsidiaries by a combined $2.78 billion, according to a new corporate filing on data platform Qichacha.
Nio shares closed 6% higher on Thursday, extending gains after touching a five-year low of $3.02 in April. The stock has traded in a narrow range of $3.36 to $4.42 since then.
In June, several brokerages cut their price targets citing Nio’s weaker-than-expected first-quarter results.
Macquarie cut its target to $3.90 from $4.70, warning of intensifying competition and ongoing cash burn in the BEV segment.
Bernstein reduced its target to $4.00 from $4.50, maintaining a ‘Market Perform’ rating. Mizuho lowered its target to $3.50 from $4.00, citing continued pressure on margins.
