đź“ť usncan Note: What’s Powering Nio Stock Higher?
Disclaimer: This content has been prepared based on currently trending topics to increase your awareness.
SHANGHAI, CHINA – MARCH 18 2025: A man passes by a dealership of NIO electric cars in Shanghai, China Tuesday, March 18, 2025. NIO and CATL have reached an agreement to jointly build the world’s largest battery swap network, a move that boosts the outlook for the Chinese EV maker. (Photo credit should read WANG GANG / Feature China/Future Publishing via Getty Images)
Future Publishing via Getty Images
The Chinese luxury electric vehicle manufacturer Nio stock (NYSE:NIO) experienced a surge of over 14% on Friday and has risen by nearly 28% over the past five trading sessions. These gains follow the company’s introduction of a competitively priced premium SUV as the electric vehicle price war in China intensifies. The newly designed third generation ES8 SUV is priced at approximately RMB 308,800 (around $43,000) under a battery subscription model, which reduces the initial cost while providing customers the flexibility to swap or upgrade batteries for a monthly fee.
The model that includes the battery is priced about 25% lower than its predecessor. This subscription approach responds to consumer concerns regarding high upfront expenses and battery dependability. The vehicle is aimed at the premium market, with a planned launch at the end of September. The Chinese electric vehicle sector is currently undergoing a fierce price competition, with companies like Tesla, BYD, Xpeng, Li Auto (NASDAQ:LI), and Nio actively battling for market share through price reductions, while various smaller startups and established automakers have also launched appealing electric vehicle models. This has led to what is arguably one of the most congested electric vehicle markets worldwide.
Expansion Into New Price Points, Markets
Nio’s delivery figures have been inconsistent. Deliveries for July 2025 totaled 21,017 units, a decrease from June’s 24,925, which represented a year-high. Although the ES8 SUV remains a premium product, the company’s value-oriented Onvo brand, which launched in September 2024, is rapidly increasing its output. Recently, the company introduced the flagship Onvo L90 SUV, starting at RMB 265,800 ($37,000), while the Onvo L60 was launched last year with starting prices of RMB 200,000 ($28,000). The L90 had more than 7,000 units delivered within the first three weeks of August.
Additionally, Nio’s new Firefly brand, aimed at the high-end compact segment, is targeting younger urban consumers in China and will play a significant role in the company’s expansion into Europe, where compact cars are in demand. Firefly vehicles begin at approximately $16,500. The competitive landscape at home, coupled with substantial manufacturing capability, has driven most Chinese electric vehicle companies to seek growth in international markets. Last week, Nio confirmed plans to enter three new countries between 2025 and 2026, including Singapore, which will mark its first Southeast Asia launch with a Firefly model. Separately, is there More Upside For SOFI Stock After A 60% Rise?
In terms of valuation, Nio stock is trading at just about 1x estimated 2025 revenue, which is significantly lower than that of its competitors. Local rival Xpeng is trading at around 2x forward revenue, while EV leader Tesla trades at a steep 11x revenue. This stark discount indicates that the market continues to have reservations about Nio’s capacity to achieve consistent growth and profitability amidst fierce competition and international hurdles. Conversely, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has demonstrated a history of comfortably outperforming its benchmark, which includes all three indices – S&P 500, Russell, and S&P midcap. What accounts for this? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; a smoother investment experience, as evidenced in HQ Portfolio performance metrics.
