(CapitalWatch, June 15, New York) Nio Inc. (NYSE: NIO; HKEX: 9866; SGX: NIO) gained nearly 8% in New York trading Wednesday after virtually showcasing its ES7 SUV. That's a 25% jump for the Chinese EV company since Monday despite the broad market slump on the Fed's rate hike.
Nio presented its ES7 Wednesday, available now for pre-order and expected to start delivering in late August. The company positioned its new electric car as a competitor to BMW's X5L and set its starting prices at 468,000 and 548,000 yuan.
In addition, Nio announced an annual upgrade of its SUVs and is equipping them with a more powerful smart technology, Alder. That includes: a faster CPU and GPU, 5G tech, NOMI assistance, HD surround view in 3D, and other perks, according to Nio's CEO William Li.
Deutsche Bank's Edison Yu said Nio's stock could be outperforming in the second half-year should Nio increase its monthly deliveries. Sales of the ES7 could significantly boost Nio's margins, while Yu sees Nio's new sedans revealed earlier, the ET7 and ET5, as very attractive cars for the Chinese consumer this year. Yu is bullish on Nio, with a $45 price target on the stock.
Earlier this week, Chinese EV stocks surged on the news that China is discussing another extension of EV subsidies that are set to expire at the end of the year. While the renewal has been in consideration for some time, the Ministry of Industry and Information Technology's Guobin Xin voiced at a press conference on Tuesday the possibility of continued support for the sector.
Last week, Nio released its first quarter financials, showing weak sales amid Covid-19 lockdowns in China that had stalled supply chains and production. The company said that its production has been gradually recovering from the recent pandemic impact, but its deliveries are still somewhat constrained. It also plans to ramp up its capacity and accelerate delivery recovery starting this month as restrictions begin to ease.