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NIO Rated Buy by Nomura, Drawing Comparison to Tesla

Nio has a 'Tesla-like top-down approach in launching its EV pipeline -- starting with its luxury flagship model ES8,' Nomura says.
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NIO  (NIO) - Get NIO Inc. American depositary shares each representing one Class A 蔚来汽车 Report shares rose Friday after Nomura analyst Martin Heung began coverage of the Chinese electric vehicle company with a buy rating and an $80.30 price target, comparing the company favorably to market champ Tesla  (TSLA) - Get Tesla Inc. Report.

Clearly investor mania for all things electric vehicle-related is raging on. NIO recently traded at $61.73, up 5.81%, and has soared an astronomical 1,205% in the past year.

It has a “Tesla-like top-down approach in launching its EV pipeline -- starting with its luxury flagship model ES8, followed by more consumer friendly models and variants, i.e., ES6, EC6,” Heung wrote in a commentary cited by Bloomberg.

NIO has entered the realm of a premium auto brand, "given car buyers are willing to pay a price similar to those for entry-level models of major European luxury original-equipment-manufacturers," Heung said, according to The Fly.

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He maintains that NIO's battery-leasing program "paves the way for the revolutionary concept of battery swapping." And he looks for NIO to “outperform other domestic ‘masstige’ automakers, which are often associated with poor quality and tackiness.”

That will help NIO sell cars from 250,000 yuan (US$38,570) to 350,000 yuan ($54,000), Heung said. And that range represents the most popular price points for the mid-to-high-end EV market in China.

Heung said his price target constitutes a 25% discount to Tesla's current price-to-sales ratio of 26.

In other EV news Friday, shares of special purpose acquisition company Climate Change Crisis Real Impact CLII rocketed higher, after Bloomberg sources said it’s close to a deal to merge with EVgo Services. EVgo is a charging network for electric vehicles powered by renewable energy.