Edison Yu's team expects Nio ET5 deliveries to likely be just 9,000 units next year, with that number expected to rise to 65,000 units in 2023 as capacity ramps up.
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Nio unveiled its highly anticipated ET5 sedan just this past weekend, and in Deutsche Bank's view, the model is expected to significantly expand the company's consumer reach.
In a research note sent to investors on Monday, Deutsche Bank analyst Edison Yu's team said they believe the ET5 will materially broaden the reach of Nio's vehicles, targeting a lower price point and showcasing a sporty design.
Nio unveiled its new sedan at Nio Day 2021 on December 18 and announced that the model is available for pre-order now, with deliveries to begin in September.
In an interview with local media on December 19, William Li, founder, chairman and CEO of Nio, said that the ET5 became the most pre-ordered model ever by Nio.
Li did not elaborate on this, but added that Nio's annual deliveries have maintained a 100 percent growth rate in recent years and are expected to maintain that pace next year.
Initial customer response was very positive, with pre-orders far exceeding internal expectations and actually causing the Nio app to crash for about 30 minutes after the unveiling, Yu's team noted.
Yu's team expects that deliveries of the Nio ET5 could be just about 9,000 units next year, with that number expected to rise to 65,000 in 2023 as capacity ramps up.
Beside the ET5, the team believes that Nio may also be working on a sporty coupe, either a variant of the ET5 or possibly a separate model.
In addition to the launch of the ET5, Nio announced at the Nio Day 2021 event that orders for the flagship sedan ET7 will be locked in from January 20, 2022, with deliveries to begin on March 28.
In total, the ET7 has over 20 features and functions optimized and enhanced during mass production, according to William Li, founder, chairman and CEO of Nio.
Yu's team believes the ET7 should sell well and that orders may already be as high as 50,000-60,000.
The team predicts ET7 deliveries of 30,000 units next year, limited by supply, and then doubling to 60,000 units in 2023. For context, the BMW 5 Series, Audi A6L and Mercedes E-Class all sell well over 100,000 units a year in China.
The team reiterated its Buy rating and $70 12-month price target on Nio.
Nio closed down 0.23 percent to $30 on Friday, and the price target implies 133 percent upside.
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