Deutsche says Nio needs to do more to right size cost structure

Deutsche Bank says despite Nio‘s 10% headcount reduction, further rationalization may be necessary for the company to properly right size its cost structure. This could take the form of additional headcount reductions and/or strategic actions resulting in 1.5B RMB of incremental savings, the analyst tells investors in a research note. The firm thinks management might have misread the market backdrop, over-hiring and attempting to bring in-house capabilities that are no longer critical to the company’s success. Deutsche keeps a Buy rating on the shares with a $10 price target.