- Calling Nio (NYSE:NIO) the "epitome" of a Chinese luxury brand and noting battery-as-a-service will be a "game changer," Nomura starts coverage on EV stock Nio with a Buy rating.
- Nomura gives the stock a price target of $80.30/share, an upside of more than 37% from its current level.
- The target is based on a 25% discount from Tesla's (NASDAQ:TSLA) P/S ratio of 26x.
- "We like NIO Inc. for the company’s Tesla-like top-down approach in launching its EV pipeline – starting with its luxury flagship model ES8, followed by more consumer friendly models and variants (i.e., ES6, EC6)," Nomura says. "We believe NIO has successfully established itself as a premium auto brand given car buyers are willing to pay a price similar to those for entry-level models of major European luxury original-equipment-manufacturers (OEMs)."
- In BaaS, as a first mover Nio "should benefit from the price advantage over other OEMs" and that by "improving swapping time to only three minutes without human-labor, and with plans to add mini-hotspots (around the size of three parking spaces) covering most parts of the major cities in China, NIO hopes to redefine the whole user experience of owning an EV," it adds.
- Nomura also notes China's aim to boost EVs to account for 20% of total annual PV sales by FY25.
- Last week Citi cut Nio shares to Neutral and lowered shipment estimates.