Shutdowns in China have hit Nio hard, but the electric vehicle maker is ready for a rebound which could come as soon as the next 15 days, according to Morgan Stanley. China’s Covid lockdowns pummeled the electric automaker in recent months, shutting down production, suppressing vehicle sales, and delaying the launch of new models. However, the government started relaxing restrictions in Shanghai over the weekend — two months after the city shut down as it faced one of its biggest Covid-19 outbreaks since the pandemic started . This could lead to big gains in the near term for Nio, Morgan Stanley said. “With gradual reopening in the Yangtze River Delta region as well as the Rmb10k subsidy provided by the Shanghai government to consumers to replace old cars with electric cars, we believe NIO is well positioned to capitalize on such local stimulus programs and resume sales momentum in the upcoming months,” wrote analyst Tim Hsiao, noting that Shanghai accounted for more than 15% of the company’s 2021 sales. Nio has fallen 47.7% since the start of 2022, but the analyst thinks the stock is likely to rebound. The bank has a $34 price target and overweight rating on the stock, meaning shares could potentially more than double from Friday’s close price. — CNBC’s Michael Bloom contributed reporting
