Nio down on Q1 delivery outlook cut, analysts see new target as 'achievable'
Investing.com | Author Vahid Karaahmetovic
Published Mar 27, 2024 06:46AM ET
Updated Mar 27, 2024 08:24AM ET
Nio (NIO) cuts Q1 delivery outlook amid lackluster demand, shares down
Shares of Nio (NYSE:NIO) fell more than 3% in premarket trading Wednesday after the electric vehicle (EV) maker revised its Q1 delivery forecast downward amidst declining demand and intense pricing competition in China.
The company now expects to deliver approximately 30,000 vehicles during the quarter, down from its earlier projection of between 31,000 and 33,000 units.
Last week, major EV manufacturers witnessed an increase in China sales, with figures generally improving as the end of the month approaches.
In the period from March 18 to 24, Nio recorded sales of 3,000 vehicles in the local market, up from 2,200 a week earlier, as reported by the local automotive news source Yiche.
The company delivered 8,132 vehicles in February, marking a 33.11% decrease compared to the same month last year and a 19.12% drop from January, based on the data released on March 1.
"We believe the Street had been expecting a guidance cut, given a softer-than-expected sales trajectory MTD, and the magnitude of cut looks fair," analysts at Morgan Stanley said in a note.
Despite the downward revision, analysts think the EV manufacturer "will still manage to balance volume growth and profitability trajectory without being overly aggressive with its pricing strategy."
To meet the updated guidance, the company must deliver at least 3,300 vehicles in the final days, a target that seems "achievable," according to analysts at Morgan Stanley.
This assessment is based on the company's production surge last week and the introduction of the new BaaS program has led to an order intake surpassing 3,000.
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