Shares of Chinese electric vehicle maker Nio fell 8.96% on Tuesday to $4.47, erasing gains from the previous four sessions.
In a new research note, Morgan Stanley linked on Wednesday the decline to production concerns over Onvo‘s new L90 model and fears of a potential capital raise.
Analyst Tim Hsiao cited “concerns over L90 production ramp-up and delivery” as the primary driver, adding that the brokerage’s checks suggested the worry may be overdone.
The stock rebounded more than 2% to $4.58 in early trading, supported by the analyst’s assessment and reports showing that BlackRock and JPMorgan had increased their holdings in Nio during the second quarter.
The sell-off comes during a volatile three-week period for the stock, with seven sessions posting moves greater than 5% as investors reacted to the L90 launch and signs of strong demand.
The SUV, the second model under Nio’s family-oriented Onvo sub-brand, is seen as critical to meeting the target of 25,000 monthly sales in the fourth quarter.
Morgan Stanley said the offering of a smaller 60kWh battery pack for the L90 — in place of the standard 85kWh unit — had “raised market concerns over the supply bottleneck of L90.”
The bank also cited the risk that recent share price gains could prompt fundraising, noting that “as most EV startups are not yet self-funding, investors are concerned that strong stock outperformance could lead to potential fundraising activity.”
The EV maker posted a net loss of 6.750 billion yuan in the first quarter, equivalent to $930.2 million. The figures represented a 30.2% year over year and a slight decrease of 5.1% from the final quarter of 2024.
The third factor, it said, was “fragile market sentiment,” with increasingly unpredictable reactions to product launches and earnings.
Order intake for the L90 has been strong since its launch on July 31, with deliveries starting August 1.
But lead times have lengthened twice last week from 4–5 weeks at launch to 8–10 weeks, prompting Onvo to attribute earlier this Wednesday delays to a “rapid surge in order volume” despite “full-capacity operations with supply chain and logistics partners.”
The company has introduced earlier this Wednesday a “Waiting Points” programme to deter cancellations: customers receive 500 points for each day beyond 28 days after order lock-in if the vehicle is not delivered.
The policy follows last year’s L60 launch, when battery shortages led to delivery delays, order cancellations and missed sales targets.
Insurance registration data for August 4–10 show Onvo’s total registrations in China down 13.5% week on week, while L90 registrations rose 5.6 per cent to 2,090 units. The brand has claimed more than 20,000 L90s are ready for delivery.
Battery supply remains under scrutiny. Nio primarily sources packs from CATL and CALB, with capacities from 60kWh to 100kWh, and also offers a 150kWh semi-solid unit with WeLion.
Chinese automotive bloggers reported on Wednesday that CATL will start supplying 85kWh packs for the L90 in September to ease shortages. Neither Nio nor Onvo has commented on the reports.
