BoA Bullish on Nio Inc. After a meeting with management

BoA Bullish on Nio Inc.  After a meeting with management

By Michael Elkins

Shares of Nio Inc. fell. (NYSE:) fell nearly 2% in premarket trading on Monday after the company held management talks with Bank of America Securities analysts.

Bank of America hosted the NIO Management Center in the second quarter, as the company saw a decline in gross margin in the second quarter of ’22 and expects margin to improve gradually on a quarterly basis based on a better mix of products. For the non-auto sales business, according to a note from an analyst, โ€œmanagement believes the loss is mainly due to the rapid expansion of charging infrastructure and expects margin improvement in the second half of โ€™22 as more vehicles are sold.โ€

Bank of America Securities and the analyst reiterated the buy rating and $30 price target on NIO due to the automaker’s strong pipelines and improved GPM.

Management noted at the meeting that the handling of ET5 requests is strong. Stronger than previous models, NIO is seeing a different customer profile with more female and young consumers. The company expects order handling to be further improved after it begins its ET5 drive-thru test. NIO will begin delivery of ET5 on September 30 and is targeting more than 10,000 units delivered in December.

Regarding the low rate of return of bulky casting parts, NIO has sent engineers to solve the problem and expects to solve the problems by the end of October. For fast charging technology, NIO has completed development of 480 kW charging piles, and plans to install them by the end of 2022. In addition, NIO will launch models equipped with 800V fast charging features in 2024.

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