Nio Stock Skyrockets 42% in July—Here’s What Fueled the Rally

Nio's shares went full throttle last month—leaving skeptics choking on EV dust. The Chinese electric vehicle maker's stock surged 42% in July, outpacing legacy automakers still stuck in neutral.

Battery-swap hype charges up investors

Market bulls plugged into Nio's expanding battery-swap network—a gamble that either revolutionizes charging or becomes a very expensive party trick.

Short squeeze or sustainable surge?

While analysts debate whether this was a fundamentals-driven rally or just another meme-stock moment, one thing's clear: When the Fed hints at rate cuts, even questionable growth stocks get their wings.

Funny how 'disruptive tech' always looks most appealing when yield curves flatten—almost like Wall Street uses innovation as a liquidity punchline.

Image source: Getty Images.

Can Nio stock fly higher?

Nio's deliveries of 24,925 vehicles in June was its highest so far this year. However, the company's July delivery numbers are already in, and it delivered only 21,017 vehicles in the month. That explains why Nio stock is down about 8% in August, as of this writing.

Should investors be worried, though? I'd say no, because August should be a bigger month for Nio as it began deliveries of L90 on August 1.

A local media report stated that Onvo president Shen Fei has set an internal target of delivering over 10,000 units of L90 in August alone. If Nio hits that number, the Onvo L90 will achieve the highest monthly sales among all of Nio's models in the company's history. Nio is aggressively ramping up production of L90 to fulfill deliveries.

Meanwhile, Nio's other sub-brand Firefly, targeted to the mass market, is rapidly expanding overseas. Firefly launched its first namesake compact electric car in April this year to take on the BMW Mini and theSmart. By the end of 2025, Nio expects Firefly to be available in 20 overseas markets, primarily across Europe.

Nio will also launch its next-generation ES8 SUV in the coming months, which management believes should drive its Nio brand sales to 25,000 units per month. If management's numbers fall in place, Nio could soon be selling over 35,000 cars every month.

Back in April, I believed Nio stock was incredibly cheap and a top value EV stock to buy. Given the company's push into mass markets and aggressive goals for L90, I see a lot more upside in the stock price.