Nio Gets Started On Mass Market Sub-Brand With Planned Annual Production Of 60,000 Units: Report

Nio Inc - ADR NIO shares are expected to take off in a big way in 2022, with the turnaround thesis premised on new product launches expected to boost volumes.

What Happened: Nio has commenced the development of a mass-market model at its Hefei manufacturing base in China's Anhui province, the CnEVPost reported, citing local media. The model will be positioned at a tier below its existing SUV models and the sedan models, such as the ET5, scheduled to be available later this year, the report added.

Nio is reportedly targeting an annual production capacity of 60,000 units. The report also said Nio's sales channel is attempting to penetrate third- and fourth-tier cities in China.

Nio's founder and CEO William Li hinted last year that a mass-market vehicle is very much in the works but would be introduced under a different brand name. The rationale looks logical, as Nio has made a name for itself as a maker of premium vehicles and it may not have wanted to dilute the Nio brand's positioning.

Related Link: Nio Stock Spiking Higher As ET5 Prototypes Roll Off Assembly Line Just 2 Months After Launch

Why It's Important: Nio had a lackadaisical year in 2021 amid volatility in deliveries due to supply chain challenges. After peaking at $69.99 at the start of the year, the stock of the EV maker pulled back notably to end the year at $31.68.

Credit Suisse analyst Bin Wang said in a recent note he expects Nio's deliveries to hit 150,000 units in 2022 due to the company's penetration into the sedan segment, with its ET7 and ET5 models. The analyst sees clear growth prospects for the EV maker in 2022.

NIO Price Action: Shares are down 0.79% at $25.89 Thursday morning at publication. 

Related Link: Will Nio's Newly-launched ET5 Pose A Threat To Tesla's Model 3?

Photo: NIO ET5 sedan via Nio