NIO ES6 price reduction and increased configuration, can it reverse the sales decline?

On May 24th, NIO-SW held a new NIO ES6 launch event, with a starting price of 368,000 yuan (equipped with a 75kWh battery pack) and 426,000 yuan (equipped with a 100kWh battery pack); the battery rental plan Baas has a starting price of 298,000 yuan.

On the day of the launch, test drives were simultaneously opened. The new NIO-SW ES6 has upgraded in appearance, power, intelligence, and other aspects on the NT 2.0 platform, and the competitiveness has been greatly improved compared to the old model:

1. The new generation ES6 cockpit layout is optimized, and the appearance size is fully upgraded;

2. The second-generation electric drive platform has improved power, and it is expected to provide nearly a thousand kilometers of endurance with the 150kWh battery pack available online in July;

3. The cockpit + intelligent driving configuration is upgraded, and the self-developed seats greatly improve comfort.

Price reduction and increased allocation with sincerity, delivery upon release

The new ES6 has been comprehensively upgraded in power system, cockpit layout, intelligence, seat comfort, and other aspects, and the product strength has been greatly improved compared to the old model. The starting price has also been reduced from 386,000 yuan to 368,000 yuan, which can be said to be sincere with price reduction and increased allocation.

Compared with the same-priced competitors such as Ideal L7, Xiaopeng G9, and Wanjie M7, the new ES6 has significant advantages in power performance, assisted driving hardware, interior and exterior design, and after-sales service.

HAITONG INT'L pointed out that with the rapid expansion of NIO-SW's battery swapping network and the launch of the 150-degree battery this year, the advantage of "rechargeable, swappable, and upgradable" of NIO-SW models over competitors will continue to expand, and the new ES6 as the main selling model will help NIO-SW increase its market share in the high-end market and reverse the recent sales decline.

CICC lowers NIO-SW's target price

However, analysts' views are not all optimistic. CICC stated that NIO-SW's sales growth in the second quarter may be lower than expected.

NIO Inc. USD OV announced that the delivery volume in April was 6,600 vehicles, a month-on-month decrease of 36%, and it is expected that the delivery volume in the second and third quarters will still face pressure. As the delivery of EC7/modified ET7 began at the end of April/mid-May, the delivery volume in May and June may record a slight improvement on a month-on-month basis.

However, it is expected that the monthly delivery in the second and third quarters will remain below 10,000 vehicles, due to the current weak order backlog and fierce competition from more new high-end new energy vehicle models from peers.

NIO Inc. USD OV has not disclosed any new vehicle timetable for 2024, especially for its mass-market brand. Given the current fierce competition, it holds a conservative attitude towards the prospects of its mass-market brand, and also sees difficulties in the company's expansion in the high-end market. China International Capital Corporation (CICC) maintains a neutral rating on NIO Inc. USD OV and lowers the target price from HKD 83.1/USD 10.5 (NIOUS) to HKD 66.6/USD 8.6 based on 1.5 times the enterprise value/sales ratio for 2023 (previously 2 times).