NIO Stock Rises Premarket As Cheaper 5-Seat ES8 Hits Roads — Can It Revive Demand After June Slump?

• The SUV offers up to 3,084 liters of cargo space after removing the third row.
• ES8 deliveries fell 22% in June, though Deutsche Bank sees potential for a demand rebound.
• Higher component costs have raised ES8 production expenses by nearly 20,000 yuan per vehicle.

U.S.-listed shares of Nio, Inc. (NIO) rose nearly 2% in premarket trading on Friday after the EV maker began nationwide deliveries of its lower-priced five-seat ES8, a launch investors are closely watching for signs of renewed demand following the flagship SUV’s June slowdown.

Nio’s U.S.-listed stock is headed for its sixth straight week of losses, declining 0.2% so far this week. 

Nio Launches Lower-Priced 5-Seat ES8

Deliveries began just one day after the model went on sale, with CEO William Li and President Qin Lihong handing over vehicles to the first customers. The five-seat ES8 starts at 382,800 yuan ($56,470), including the battery, or 274,800 yuan under Nio’s battery subscription plan. This is 24,000 yuan, or 6%, below the three-row ES8’s starting price. Removing the third row increases maximum cargo capacity to 3,084 liters, positioning the model for buyers seeking more storage at a lower price, CnEVPost noted.

The launch comes after a 22% month-over-month decline in ES8 deliveries to 8,969 units in June, ending seven straight months above 10,000 units. Deutsche Bank said that some customers likely postponed purchases while waiting for the five-seat version, making the rollout a potential catalyst for a demand rebound.

Nio’s ES8 Drives Premium Growth

The ES8 reached 120,000 deliveries on June 22, just 275 days after the third-gen model entered the market. Nio said it led China’s large SUV and 400,000-yuan vehicle segments for six consecutive months. Li has called the five-seat version key to making the ES8 a more enduring “king” of the large SUV market.

The main Nio brand’s average transaction price rose to 443,000 yuan in June, while Deutsche Bank expects higher-margin flagship vehicles to help the company reach second-quarter non-GAAP breakeven. Li also said that more than 68% of ES8 buyers previously owned vehicles from BMW, Mercedes-Benz, Audi or Porsche. “Our users often joke that the next stop after BBA is Nio,” he said.

Rising Costs Pressure Nio ES8 Margins

The launch comes as rising raw material and component prices squeeze Chinese EV makers. Li said that the cost of each ES8 has increased by nearly 20,000 yuan. Fully offsetting higher memory-chip costs would theoretically require a price increase of around 30,000 yuan, he added.

Nio is working with suppliers to contain the impact while keeping prices stable. The ES8 still has enough gross-margin room to absorb some of the increase, Li said, adding: “In the short term, this is still within what we can bear.”

How Do Retail Traders Feel About NIO?

On Stocktwits, retail sentiment for NIO slipped to ‘bearish’ from ‘neutral’ levels a week ago amid a 33% rise in 24-hour message volumes.

One user said, “$NIO Smart money is trying to bore retail to death so they will sell. Once they have accumulated enough of our shares for a low price, this will take off. A recent example is Oscar. Highly undervalued company that was range bound for years. Look at it now. Same will happen to NIO!”

Another user said, “$NIO Price is pinned. Even if it goes to $5.1’s it’s clear $BABA is the play for Chinese stocks. Sad to say”

Nio’s U.S.-listed stock has risen 37% over the past year. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Can IBRX Stock Keep Its Pulse? Institutional Investors Buy In, Retail Hopes For Big Q2 Surprise