Nio shares fell 4% to $3.92 in early Wednesday trading after J.P. Morgan downgraded the stock to Neutral from Overweight and cut its price target to $4.50 from $7.00, while peers XPeng and Li Auto slipped just 1% each. The bank cited sluggish demand in China's passenger-vehicle market, intensifying price competition, and limited overseas exposure, cutting its 2026 and 2027 revenue estimates by 5% and 9% and adjusted earnings forecasts by 13% and 52%. Despite praising Nio's second-quarter results, which showed an 18.5% vehicle gross margin, J.P. Morgan flagged cost pressures of 2,000 to 3,000 yuan per vehicle in the second half from batteries and chips. The firm now models adjusted net losses of 2.34 billion yuan in 2026 and 975 million yuan in 2027, reversing its prior profit forecast, and expects China passenger-vehicle demand to be flat to down 5% in 2027. Among Chinese automakers, J.P. Morgan continues to prefer BYD and Geely, while naming Xiaomi and Zeekr as rivals in the premium segment.
NIO IncJ.P. Morgan downgrades Nio to Neutral and cuts price target, citing weak demand and competition.
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