Shares of Chinese automaker Nio Inc. climbed over 6% on Thursday following the launch of its new Onvo L90 SUV. The surge offers a bright spot for the company, which has seen its stock fall approximately 15% year-to-date amid intense competition in China’s electric vehicle market, persistent delivery challenges, and questions surrounding its long-term profitability.
The Onvo L90 is the first vehicle under Nio’s new, more affordable Onvo sub-brand. Pre-sales have begun with a price of RMB 279,900, or RMB 193,900 for customers opting for the battery-as-a-service (BaaS) plan. Deliveries are scheduled to start on August 1.
Following the launch, Morgan Stanley analyst Tim Hsiao reiterated a “Buy” rating on Nio with a $5.90 price target. Hsiao believes the three-row L90 presents a compelling value proposition, offering premium features like 900V fast charging, an augmented reality head-up display, air suspension, a smart refrigerator, and L2+ autonomous driving powered by an Nvidia Orin-X chip.
The analyst noted that the L90 is priced to challenge not only premium models like the Li Auto L9 and AITO M9 but also more affordable SUVs such as the Li Auto L6, XPeng G9, and Xiaomi SU7, broadening its potential market appeal. Hsiao suggested the final pricing may be even more competitive than market expectations, which could help the model stand out in a crowded segment.
However, Hsiao cautioned that as a new and relatively unknown entity, the Onvo brand must still build customer trust and demonstrate a strong execution and delivery record. He believes the success of the L90 and future Onvo models will be critical for Nio’s turnaround, provided the company can perform well in a market where consumers are highly sensitive to both price and value.
Reflecting this mixed outlook, the broader Wall Street consensus on Nio stock is a “Hold,” based on two “Buy,” seven “Hold,” and one “Sell” rating issued in the last three months. The average analyst price target of $4.40 suggests a potential upside of 19.24% from current levels.
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