Investing.com -- Citi has placed Nio (NYSE:NIO) stock on a 30-day positive catalyst watch amid expectations of a faster-than-expected rollout of new models, the upcoming launch of the new driver-assistance system and chip upgrades, and improving cost dynamics.
The Wall Street bank believes the Chinese electric vehicle (EV) maker is positioned for a material sequential rebound in vehicle shipments and margin recovery in the coming quarters.
Citi analysts project Nio could deliver approximately 63,000 units in the second quarter, up 50% from the previous quarter.
Deliveries may accelerate to 100,000–120,000 units in the third quarter and 120,000–150,000 units in the fourth, implying a potential re-rating of full-year 2026 volumes to 600,000 units from Citi’s current forecast of 456,000.
Nio is expected to ramp up production of ten new models in 2025. Inventory of older models should be cleared by mid-May, paving the way for the launch of four new vehicles under the 5-series and 6-series nameplates.
“New 5-series and 6-series production cost should be further improved largely by enhancing the common auto-parts sharing potion, as well as simplified platform architecture,” analysts led by Jeff Chung said in a note.
Additional launches include the third-generation ES8 and new models under the Onvo and Firefly sub-brands.
Cost reductions are also a central theme in Citi’s thesis. The automaker will debut its self-developed Advanced Driving Assistance Systems (ADAS) chip by the end of May, replacing Nvidia’s chip and potentially lowering the bill of materials by roughly RMB10,000 per vehicle.
Vehicle gross margins, which likely fell in the first quarter, are forecast to recover to 13% in the second quarter and 18–20% by the fourth quarter for the Nio brand.
Citi maintained its Buy rating and kept its target price unchanged at $8.10 for Nio’s U.S. shares and HK$62.50 for the Hong Kong listing.
The bank expects Nio to continue rolling out more new models into fiscal year 2026, supported by declining R&D and SG&A costs on a percentage-of-revenue basis.
