Nio Stock Has Risen 37.5% in a Month. Will the Uptrend Continue?

The Nio Inc – ADR (NYSE: NIO) stock price has risen 37.5% in the past month as investor sentiment towards the Chinese EV company shifted to more positive. Nio stock is up 5.58% since the year started, and many wonder whether the rally will continue.

The short answer is that we could easily see Nio shares rally much higher, given that the stock has fallen massively from its January 2021 all-time highs of $66.88 per share. The company is still down from its June 2022 high of $24, indicating room to rally higher. 

Nio is also set to benefit from the growing demand for new energy vehicles in its home market of China, where more consumers are switching to EVs, especially Chinese-branded EVs, instead of traditional internal combustion engine (ICE) vehicles. Still, there could be some tough times ahead for the company. 

According to Nio’s June delivery numbers, the company delivered 10,707 vehicles, down by 17% year-over-year (YOY). The most popular vehicle line of the deliveries was premium smart electric SUVs, with sold 6,383 units. The decline in deliveries is part of a broader industry-wide trend. 

Many EV companies have struggled to attract buyers amid the high inflation, leaving consumers with less discretionary income to spend on items such as cars. However, there is hope for the industry as the economic environment, and China is expected to improve in H2 2023. 

Furthermore, a report from consultancy firm AlixPartners has Nio’s shareholders excited. According to its estimates, Chinese automotive companies are on track to provide over 50% of cars sold in China this year for the first time. 

An analyst at AlixPartners, Stephen Dyer, expects over nine million Chinese-branded vehicles to be sold annually in China by 2030. These estimates show that despite the recent declines in deliveries, the Chinese EV market is expected to keep growing over the medium to long term. 

Nio shares will benefit immensely from the higher demand in China if it can also ramp up its manufacturing capacity to build and deliver more vehicles compared to its current capacity. 

*This is not investment advice. 

Nio stock price. 

The Nio stock price has risen 37.50% in the past month. Will the uptrend continue?