NIO Inc. Supply Constraints 'Crimped' Sales - Morgan Stanley

© Reuters. NIO Inc. (NIO) Supply Constraints 'Crimped' Sales - Morgan Stanley

By Sam Boughedda

Chinese electric vehicle company NIO Inc. (NYSE:NIO) released its deliveries update for July on Monday, revealing it delivered 10,052 vehicles during the month, increasing by 26.7% year-over-year but falling 22% from the 12,961 delivered in June.

Following the announcement, a Morgan Stanley analyst, who has an Overweight rating and $31 price target on the stock, told investors in a research note that supply constraints crimped NIO's July sales, coming in at the low end of their forecast of 10k to 11k.

July deliveries consisted of 7,579 units of ES8, ES6 and EC6 (-12% MoM) and 2,473 units of ET7 (-43% MoM). During the month, production of ET7 and EC6 were constrained by the supply of casting parts. NIO has been working closely with supply-chain partners and expects to accelerate vehicle production in the coming months, said the analyst. We are looking for ~50% QoQ volume growth to 36-38k for NIO, implying a more significant sales upturn in August/September, driven by ET7 and ES7 and revamped ES8, ES6 and EC6.