Goldman Sachs Maintains NIO Neutral Rating, Expects 2026 Non-GAAP Operating Profit to Turn Positive
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Goldman Sachs Maintains NIO Neutral Rating, Expects 2026 Non-GAAP Operating Profit to Turn Positive
The report argues that NIO has strong orders and a robust new product pipeline, and that cost pressure can be partly offset through product mix and supply chain efficiency, but competition in the premium NEV market has intensified significantly; the 12-month target price remains US$6.6/HK$52.
- 1Q26 deliveries reached 83k units, up 98% YoY; ES8 orders were strong, and orders continued to improve after the launch of the new ES8.
- Goldman Sachs expects 2026E sales of 471k units, up 45% YoY, revenue growth of 60%, and gross margin expansion to 17.6%.
- Management expects the roughly Rmb10k increase in BOM costs to be offset by product mix, stable pricing, engineering efficiency, and supplier negotiations.
- Goldman Sachs expects 2026E non-GAAP operating profit of Rmb1.3bn, with 2Q26E as the trough before operating profit remains positive.
- Valuation is about 0.7x 2026E P/S, in line with the China auto OEM industry average, so the Neutral rating is maintained.
Report interpretation
Overview
This is Goldman Sachs' company research and conference call note on NIO. The core view is that NIO delivered a second consecutive quarter of positive non-GAAP operating profit in 1Q26 and provided stronger-than-expected sales growth guidance; the new product cycle, ES8 orders, and scale effects should help offset rising raw material and BOM cost pressure, but competition in the premium NEV market has intensified significantly. Goldman Sachs maintains Neutral on NIO ADR and H shares, with a 12-month DCF target price unchanged at US$6.6/HK$52.0.
Core views
Goldman Sachs raised its 2026E-2030E non-GAAP net profit forecasts from Rmb-1.8bn to Rmb6.7bn to Rmb1.5bn to Rmb6.8bn, mainly due to better-than-expected sales and revenue guidance. For 2026, the report expects NIO revenue to grow 60%, sales to reach 471k units, gross margin to improve from 13.6% in 2025 to 17.6%, and non-GAAP operating profit to turn positive at Rmb1.3bn. On the product side, the ES9, L80, facelifted L60, and the five-seat ES8 in 2H26 are expected to support sales momentum. On the cost side, the roughly Rmb10k increase in BOM costs is expected to be offset by a higher mix of high-margin models, stable pricing, efficiency gains, and supply chain collaboration.
Analysis framework
The report analyzes management guidance from the post-earnings conference call, vehicle order data, sales and revenue forecasts, gross margin and expense ratio assumptions, balance sheet and working capital changes, and a DCF valuation framework, and compares NIO's 2026E P/S valuation with the China auto OEM industry average.
Methodology notes
12-month DCF target price
Goldman Sachs uses a DCF valuation, assuming an 11.8% WACC and a 3.5% perpetual growth rate, to arrive at an ADR/H-share target price of US$6.6/HK$52.0.
relative valuation based on price-to-sales multiple
The report notes that NIO trades at 0.7x 2026E P/S, in line with the China auto OEM industry average of 0.7x, which is an important reason for maintaining the Neutral rating.
growth, financial return, valuation multiples, and composite factors
The Goldman Sachs factor framework compares stocks with the market and industry peers using growth, financial return, valuation multiples, and composite percentile metrics, but this note does not provide NIO's specific factor percentiles.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- NIO 09866.HK / NIO ADRresearch coverage target
- Strengths
- Strong ES8 orders, a dense 2026E new product pipeline, improved cost control, rising net cash, and a likely turn to positive non-GAAP operating profit.
- Weaknesses
- ONVO brand awareness remains a challenge, 2Q26 sales and marketing expenses are elevated, and historical market share fell from 3.8% in 2020 to 2.3% in 2025.
- Comparison
- 0.7x 2026E P/S is in line with the China auto OEM industry average; the number of premium NEV competitors has increased significantly.
- Risks
- Sales below expectations, larger-than-expected price cuts, intensifying competition, and continued raw material cost inflation.
- ONVONIO sub-brand
- Strengths
- Positioned in the mid-tier family market, with models such as the L90 contributing to 2026E revenue and sales growth.
- Weaknesses
- Management sees brand awareness as still a challenge, requiring celebrity partnerships and door-to-door outreach to raise visibility.
- Comparison
- Forms a multi-brand portfolio together with NIO's high-end pure-electric brand and Firefly's premium niche brand.
- Risks
- Slow improvement in brand awareness, product positioning overlap, or weaker-than-expected market acceptance.
- FireflyNIO sub-brand
- Strengths
- Positioned in a family-oriented premium niche market, with new versions and limited editions planned to sustain attention.
- Weaknesses
- Scale and profitability contribution are not quantified in the report.
- Comparison
- Distinct from NIO's premium pure-electric brand and ONVO's mid-tier family market.
- Risks
- Insufficient demand in the niche segment or difficulty sustaining brand momentum.
Key data
- 1Q26 deliveries83k unitsUp 98% YoY, driven by demand for high-end models.
- 2026E sales forecast471k unitsUp 45% YoY.
- 2026E revenue growth forecast60%Supported by full-year deliveries of L90/ES8 and multiple new and facelifted models.
- 1Q26 gross margin19%Vehicle gross margin was 18.8%, up 10.2 percentage points YoY and 18.1 percentage points QoQ.
- 2026E gross margin forecast17.6%Up from 13.6% in 2025, driven by improved product mix and scale effects.
- BOM cost pressureAbout Rmb10kMainly due to higher raw material prices for lithium, copper, memory chips, and other inputs.
- 2026E non-GAAP operating profitRmb1.3bnGoldman Sachs expects 2026E to turn positive, with 2Q26E as the trough for operating profit.
- 2026E valuation0.7x P/SIn line with the China auto OEM industry average of 0.7x.
- 1Q26 net cashRmb32bnHigher than Rmb30bn in 4Q25 and Rmb8bn in 1Q25.
- Target priceUS$6.6/HK$52.012-month DCF target price remains unchanged.
Impact & implications
The report is constructive on NIO's short- to medium-term operating improvement, especially the new product cycle, ES8 orders, scale effects, margin potential in the services and power solutions businesses, and the potential for intelligent-driving subscriptions. However, Goldman Sachs believes the current share price and the upside implied by the target price are insufficient to support a more positive rating, and premium NEV competition has intensified, with new models in the Rmb250k+ segment rising from 30 last year to 61 this year, leaving pricing and order uncertainty still high. The investment implication is to focus on the realization of the earnings inflection rather than simply chasing sales growth.
Risks
- Competition in the premium NEV market is intensifying, with the number of new models in the Rmb250k+ segment rising from 30 last year to 61 this year.
- Sales below expectations could weaken scale effects and delay the earnings inflection.
- Larger-than-expected price cuts could compress vehicle gross margin.
- Higher prices for lithium, copper, memory chips, and other raw materials could further raise BOM costs.
- New model launches and marketing activities could push 2Q26 SG&A expenses higher.
- ONVO brand awareness may improve more slowly than expected.
What to watch
- Order and delivery performance of the ES9, L80, facelifted L60, and five-seat ES8.
- Whether 2Q26 vehicle gross margin can stay in the 17%-18% range.
- Whether the increase in BOM costs can be offset by product mix, stable pricing, and supply chain negotiations.
- Whether 2026E non-GAAP operating profit can remain positive after bottoming in 2Q.
- Brand awareness, sales, and product cadence for ONVO and Firefly.
- Penetration of paid ADAS subscriptions and progress on the Nio World Model upgrade.
- Working capital turnover, receivable/inventory/payable days, and changes in net cash.