J.P. Morgan: NIO's 2026 sales guidance far exceeds expectations, new Le Dao model may become a "killer" vehicle

``` NIO’s Q4 2025 results were basically in line with expectations, but management’s guidance for full-year sales and profitability in 2026 far exceeded market expectations, impressing investors. According to Chasing Wind Trading Desk, JPMorgan’s research report released on March 11 stated that NIO’s management set a target of 40%–50% sales growth for 2026, corresponding to around 463,000 to 496,000 vehicles. This is significantly higher than JPMorgan’s previous forecast of about 30% growth, or 433,000 vehicles. At the same time, management maintained its full-year non-GAAP profitability guidance, despite facing sluggish demand in Q1 and rising raw material costs for memory chips, lithium, and copper. JPMorgan described this stance as “a major surprise to the market.” After the news was released, NIO’s US shares surged by 15%. JPMorgan maintained its Overweight rating on NIO with a target price of $7 (December 2026). 2026 Sales Guidance Exceeds Expectations, Full-year Profit Target Unchanged JPMorgan’s report pointed out that NIO’s management’s core strategy in 2026 centers on new and revamped models driving sales growth. Management targets 40%–50% sales growth this year, reaching 463,000–496,000 vehicles, higher than JPMorgan’s previous forecast of 433,000. JPMorgan stated that it is conservatively maintaining its previous sales forecast but sees potential for upside. On the profitability side, management expects Q1 vehicle gross margin to be about 18%, in line with Q4, despite a roughly 37% quarter-on-quarter decline in sales and increased raw material costs this quarter. Management explained that the strong sales mix of the high-end ES8 model and limited cost impact are the main factors supporting gross margin. With sales expected to recover starting in Q2, management maintains full-year non-GAAP profitability guidance. Based on this, JPMorgan significantly raised its earnings forecasts: 2026 adjusted EPS loss narrows from RMB 2.18 to RMB 1.33, and the 2027 adjusted EPS is raised from a loss of RMB 0.09 to a profit of RMB 0.15, an increase of 256%. LeDao L80 SUV May Become a “Killer” Volume Model JPMorgan’s report particularly highlights that the L80 SUV under the LeDao brand is the key to NIO’s volume and profitability in 2026. This model is expected to debut at the Beijing Auto Show in April and start deliveries in May. JPMorgan believes the L80 is likely to become a potential best-selling volume model and, together with the LeDao L90 and NIO ES9 SUV, will form the core pillars of NIO’s 2026 sales. JPMorgan’s China Auto Sentiment Index confirms this judgment. The AI-driven index shows that NIO buyers’ sentiment is rebounding from a low, with the sentiment index jumping from the 75th percentile historically to a new high, outperforming its peers. Furthermore, NIO, through its subsidiary Shenji Technology (with over 60% ownership), is developing its own ADAS chips. JPMorgan believes this move will not only enhance NIO’s autonomous driving capabilities but may also open up to external customers (including automakers or suppliers), representing long-term strategic value. The overseas presence of the Firefly brand is still small, but JPMorgan sees its long-term potential as positive. JPMorgan’s Dec-26 target price of $7 is based on a 0.9x 2026 expected price-to-sales ratio and a 0.6x 2026 expected EV/sales blended average, with the multiples still below the average 1x price-to-sales and 0.8x EV/sales levels of new energy vehicle startups. Risk Warning and Disclaimer The market carries risks, and investments should be made cautiously. This article does not constitute individual investment advice, nor does it take into account the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investing based on this content is at your own risk. ```