Nio ONVO L60 Refresh: Price Cut of 7-13% with Comprehensive Intelligent Driving Hardware Upgrades

Overview

Morgan Stanley issued a research report on Nio Inc. (9866.HK) reviewing the launch of its subsidiary brand ONVO's refreshed L60. The report states that while the new model achieves a generational leap in hardware configuration, the selling price has instead decreased by 7-13%, creating a genuine positive surprise. The institution is optimistic that the more competitive pricing will increase the sales mix of higher-spec models and help Nio achieve a Q2 2026 delivery target of 110,000 to 115,000 units, maintaining the Overweight rating and 58 HKD target price for Nio.

Core views

Product Power and Pricing Strategy: The new L60 is defined as a 'substantial refresh.' In terms of hardware, the new car is the first to feature Nio's proprietary 5nm automotive-grade Shendao NX9031 chip and adds a LiDAR version, paired with the latest NWM (Nio World Model), aiming to significantly enhance the intelligent driving experience. With the L60 update, all ONVO models under the L90/L80/L60 lines have completed platform unification, standardizing the NX9031 chip, NWM, and SkyOS Tianxu operating system across the range. Despite the substantial hardware upgrades, the new vehicle purchase price is set at 192,800 - 222,800 RMB, or 135,800 - 165,800 RMB under the BaaS battery leasing scheme, representing a 7%-13% reduction from the old model. The report suggests this 'more features, lower price' strategy should drive sales structure towards higher-spec versions, consistent with recent trends in both ONVO and the broader Chinese SUV market. Sales Outlook and Delivery Schedule: Nio has set a Q2 2026 delivery target of 110,000 - 115,000 units, implying June monthly deliveries must reach 43,000 - 48,000 units, exceeding the average of approximately 33,500 units in April-May by 10,000 - 15,000 units, approaching historical records. Considering the ramp-up of L80 sales, contributions from ES9, and additional momentum from the refreshed L60, the report deems the quarterly target highly achievable, with potential for upside. The current market debate focuses on whether the momentum post-L60 relaunch can be sustained—that is, whether the extremely competitive pricing and upgraded intelligent platform can extend ONVO's sales growth cycle, a point requiring close attention.

Analysis framework

The research report employs a typical new car launch event-driven analysis framework. First, it quantifies changes in product cost-performance ratio and their potential impact on consumer purchase decisions by comparing configurations and prices between old and new models. Second, it verifies the certainty of short-term performance realization by breaking down and analyzing the company's quarterly delivery guidance against monthly high-frequency data. Finally, it evaluates the sustained impact of a single model's competitiveness on overall brand sales momentum within a broader competitor matrix. Regarding valuation, a probability-weighted approach is used, comprehensively considering multiple scenarios such as macroeconomic improvements or deteriorations, and industry competition intensifying or easing.

Methodology notes

• Valuation Method

  Probability-Weighted Scenario Valuation

  The report does not base Nio ADR's target price on a single forecast but assigns weights of 25%/50%/25% to Bull, Base, and Bear scenarios for weighted averaging. This method is suitable for growth companies like Nio that are not yet stably profitable and are heavily influenced by macro conditions and competitive landscape, reflecting risks and opportunities more comprehensively than single PE or PS valuations.

• Quantitative/Factor/Portfolio TheoryBeta/alpha analysis

  High Beta Coefficient and WACC Setting

  The report uses a Beta of 2.4 and WACC of 17.8% in its valuation. A Beta of 2.4 implies Nio's stock theoretical volatility is approximately 2.4 times that of the broad market, classifying it as a high-elasticity asset. The higher WACC reflects the market's risk premium requirements given the company's development stage. Understanding these parameters helps investors grasp the stock's high-volatility characteristics and valuation sensitivity.

• Competition and Strategy FrameworkMoat / competitive advantage

  Platform Unification and Technology Reuse

  The report emphasizes that all ONVO models have achieved platform unification regarding the NX9031 chip, NWM World Model, and SkyOS system. In the automotive industry, unification of underlying technology platforms is key to building economies of scale and reducing marginal R&D costs. It allows automakers to rapidly reuse high-level intelligent driving capabilities across different price points, achieving low prices without compromising intelligent experiences.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Nio Inc. (9866.HK / NIO.N)

  Direct Beneficiary: Sub-brand ONVO L60 refresh launch; increased specs and price cuts expected to boost Q2 deliveries and market share

  Strengths

  Mass production of proprietary 5nm intelligent driving chip onboarded; full-brand platform unification completed; entry price as low as 135,800 RMB under BaaS mode, showing strong price competitiveness

  Comparison

  Compared to competitors like Tesla Model Y (264,000 - 314,000 RMB) and Xiaomi YU7 (234,000 - 390,000 RMB), the L60 possesses differentiated advantages in starting price and intelligent driving hardware specifications

  Risks

  L60 refresh sales momentum may prove unsustainable; if sales fall short or operational efficiency improvements lag, it could pressure valuation

Key data

• New L60 Onboard Selling Price192,800 - 222,800 RMBDecrease of 7%-13% compared to the old model
• New L60 BaaS Selling Price135,800 - 165,800 RMBPurchase threshold under the battery leasing scheme
• Q2 2026 Delivery Target110,000 - 115,000 unitsImplies June deliveries of 43,000 - 48,000 units
• April-May Average Delivery VolumeApproximately 33,500 unitsServes as the sequential benchmark for June delivery expectations
• Valuation WACC17.8%Reflects risk pricing as the business approaches maturity
• Beta Coefficient2.4Indicates high volatility characteristics of the stock price

Impact & implications

The report believes the L60 refresh holds multiple positive implications for Nio. In the short term, aggressive pricing and configuration upgrades directly enhance the product's competitiveness in the 200,000 RMB SUV market, potentially reversing or accelerating sales growth curves and helping the company hit new delivery highs in Q2. In the medium-to-long term, the completion of intelligent platform unification for the entire ONVO lineup marks a transition for Nio's multi-brand strategy into a phase of technology reuse and realization of scale effects, aiding operational efficiency improvements. For investors, the core observation point moving forward is whether the sales momentum from the L60 refresh is sustainable rather than being merely a one-time pulse increase.

Risks

• New car sales below expectations; L60 refresh hype fails to convert into sustained orders
• No clear signs of operational efficiency improvement; loss narrowing slower than market expectations
• Overall slowdown in automotive industry sales growth suppressing sector valuation levels

What to watch

• Weekly/monthly order and delivery data for the refreshed L60 post-launch to verify the sustainability of sales momentum
• Whether final June and Q2 2026 delivery volumes reach or exceed the 110,000 - 115,000 unit target range
• Changes in the proportion of high-spec versions (including LiDAR) within total L60 sales to validate the product structure upgrade thesis