Nio Inc (NYSE: NIO) is up nearly 10% this morning after launching the L90 – a flagship three-row electric SUV under its sub-brand Onvo.
Onvo L90 launch marks NIO’s strategic expansion into the family-oriented vehicle segment – and the initial customer enthusiasm suggests the Chinese automaker will likely succeed in carving out a niche in the 7-seater SUV space.
Nio opened pre-sales for the L90 on July 10th. The 85 kWh model has been priced at 279,000 yuan ($39,000) while the battery-as-a-service (BaaS) version goes for 193,900 yuan.
Onvo L90, slated to begin deliveries on August 1st, comes packed with premium features such as 900V fast charging, AR-HUD, air suspension, and Nvidia’s Orin-X smart driving platform, which position it as a serious contender in the China’s crowded EV market.
Including today’s rally, NIO stock is up some 30% versus its year-to-date low in early April.
Morgan Stanley recommends owning Nio stock
NIO shares are pushing significantly to the upside at writing also because Morgan Stanley analysts reiterated their “overweight” rating on the EV stock on Friday.
According to the investment firm, competitive pricing and a feature-rich design of the Onvo L90 will likely attract strong demand – potentially helping NIO stock print a new high of $5.90 over the next 12 months.
Morgan Stanley praised the L90’s ability to match or exceed rivals in interior space, smart driving capabilities, and charging infrastructure as it forecast another 45% upside in NIO Inc from current levels.
Its analysts view the company’s new three-row electric SUV at less than 300K yuan as a strong contender to steal share from Xpeng’s G9, Li Auto’s L9, and Xiaomi’s YU7.
Are NIO shares really worth owning?
Onvo L90 launch signals Nio’s intent to aggressively scale its sub-brand and capture market share in the large SUV segment. If successful, this new addition to the product line-up could catalyse brand momentum and revenue growth.
More broadly, the automaker seems to be executing quite well on its cost-reduction strategy as a potential driver of profitability over the next three years.
Meanwhile, NIO’s commitment to reaching a monthly volume of 50,000 units by the end of 2025 underscores its operational ambition as well.
Investors could also take heart in the fact Nio continues to record a material increase in deliveries. In June, it delivered nearly 25,000 vehicles – up more than 17% on a year-over-year basis, while its Q2 deliveries as a whole were up 25.6%.
How does Wall Street recommend playing NIO
Finally, it’s worth mentioning that Morgan Stanley isn’t the only Wall Street firm that’s keeping bullish on NIO shares.
The consensus rating on the EV stock also currently sits at “overweight” with the mean price target indicating potential upside of more than 15% from here – according to The Wall Street Journal.
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