Morgan Stanley noted that NIO is poised for a comeback in the following days after China’s lockdown
Chinese EV maker, NIO’s shares are currently rising in the market. This is after analyst firm Morgan Stanley gave the EV maker a boost. The analyst firm expects NIO’s share to increase after the COVID-19 lockdowns are lifted in Shanghai.
“The associated production disruption also adversely affects the ramp-up/launch of NIO’s new models and aggravates the market’s concerns over NIO’s sales momentum.” Analyst Tim Hsiao stated via Seeking Alpha.
“With gradual reopening in the Yangtze River Delta region as well as the Rmb10k subsidy provided by the Shanghai government to consumers to replace old cars with electric cars, we believe NIO is well-positioned to capitalize on such local stimulus programs and resume sales momentum in the upcoming months,” Hsiao added.
The analyst firm also expects NIO to benefit from new subsidies offered to EV buyers.
After the two-month lockdown in Shanghai, authorities have reportedly started taking things out of buildings to get ready for its reopening.
According to Bloomberg, after lifting restrictions, the Chinese government also said that it would reduce the purchase tax levied on some low-emission passenger vehicles by half. This is to help the country’s economic growth after the lockdown crushed the market.
Morgan Stanley has a price target of $34 and has an overweight rating for NIO stock.