NIO Inc. (NIO) is in the spotlight after a sharp rebound in its stock price and growing optimism about its new vehicle lineup. Recently, Morgan Stanley analyst Tim Hsiao reiterated a Buy rating on the Chinese EV maker, while maintaining a $6.50 price target.
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NIO shares have surged more than 90% since hitting a low in June, far outpacing the Hang Seng Index’s 9% gain over the same period. The stock touched Hsiao’s target during Monday’s session, raising questions about whether the rally marks a turning point for NIO.
Four Reasons Why the Rally May Stick
According to the analyst, pre-orders for NIO’s new ES8 SUV may have surpassed 30,000 units over the weekend, backed by a modest RMB 5,000 refundable deposit. While actual demand depends on conversion rates, early feedback suggests the ES8 could go viral, much like the Onvo L90 did last month. He believes this could support monthly sales of 40,000–50,000 units starting in October.
Hsiao also pointed out that NIO’s trading value topped $2.5 billion over just two days, indicating strong fund flow and investor interest.
Further, the analyst noted a shift in investor concerns. Instead of questioning NIO’s demand and execution risks, attention is shifting to upcoming models such as the L60 and L80 facelifts, expected in early 2026.
Finally, Hsiao highlighted that NIO’s rising share price is fueling confidence in its ability to raise capital and execute its strategy. He believes this may support its operational value amid a fast-growing EV market.
NIO’s Growth Strategy
NIO’s recent efforts to grow include offering more affordable cars, expanding globally, and using its own technology. The company’s new ES8 SUV, priced at $43,000 under its Battery-as-a-Service model, is getting lots of attention and is cheaper than rivals such as Tesla’s (TSLA) Model Y.
The company also slashed the price of its 100-kWh battery pack, making its long-range vehicles more affordable.
On the global front, NIO is expanding its presence to Singapore, Uzbekistan, and Costa Rica between 2025 and 2026 through partnerships with local distributors. Technologically, NIO aims to use its own Shenji NX9031 chips for smart driving features. This helps the company rely less on U.S. suppliers and make its supply chain stronger.
Is NIO a Buy, Sell, or Hold?
Overall, Wall Street has a Hold consensus rating on NIO stock, based on three Buys, seven Holds, and one Sell assigned in the last three months. The average NIO stock price target of $4.85 implies 22.4% downside potential from current levels.
