Is NIO A Buy? EV Maker Gains Edge With New Models, Expanding Tech Infrastructure

NIO NIO stock is trading upwards on Monday in stark contrast to its peers Li Auto  LI, XPeng XPEV.

Chinese President Xi Jinping cautioned local government leaders against excessive spending on artificial intelligence (AI), electric vehicles (EVs), and other emerging sectors, according to a Financial Times report.

During the Central Urban Work Conference in Beijing on July 14–15, Xi criticized the surge in uncoordinated investments in strategic industries, warning that impulsive decisions were leading to inefficiency and wasted national resources.

Also Read: NIO Stock Rises as Onvo Launches $39K L90 SUV to Challenge Li Auto in China's EV Family Market

Xi questioned whether every province truly needed to develop AI, EV, and computing sectors, highlighting the risk of duplication across regions. His remarks follow a wave of provincial efforts to build AI infrastructure, including in remote areas like Xinjiang and Inner Mongolia, as local authorities compete for funding and tech projects.

The report also raised concerns about the lack of technical expertise behind many of these initiatives, warning that large-scale investments could fail to deliver returns without strategic oversight and skilled execution.

NIO is up 5% year-to-date despite gaining 27% in the last three months. NYSE Composite Index (which NIO is a component of) surged 8% and over 14% during the periods. The EV maker continues to face pressure from aggressive expansion and cost-cutting as it navigates intense price competition in China's EV market.

As part of its strategy, NIO is expanding into two sub-brands while preparing to launch its third-generation ES8 SUV. According to CnEV Post, the upcoming model will feature a 102-kWh high-capacity battery—the same used in the ET9 sedan—offering a CLTC-rated range of 635 kilometers.

Regulatory filings show the new ES8 weighs 2,630 kilograms, with the battery alone contributing 545 kilograms, resulting in an energy density of 187 Wh/kg. CATL supplies the ternary lithium battery.

NIO rescheduled its annual NIO Day to the fall to align with fourth-quarter sales momentum. The event will showcase the new ES8, which will be available in six- and seven-seat versions and will feature larger dimensions than its predecessor, including a 5,280 mm length and a 3,250 mm wheelbase.

Last week, Chinese EV stocks, including NIO, Li Auto, and XPeng, gained after the U.S. eased chip export restrictions and Nvidia NVDA announced plans to resume H20 GPU shipments to China. Nvidia also introduced a new RTX PRO chip tailored for the Chinese market, signaling a potential rebound in tech and EV sectors amid shifting U.S. regulatory dynamics.

On July 11, Morgan Stanley analyst Tim Hsiao reaffirmed a Buy rating on NIO and maintained a $5.90 price target, pointing to the Onvo L90 launch as a major catalyst. He views the new SUV rollout as a strategic move that strengthens NIO's competitive position against domestic rival Li Auto, especially with the L90's aggressive pricing and early availability. Hsiao sees the launch as a positive signal for NIO's execution and growth potential in China's intensifying EV race.

NIO Price Action: NIO shares were up 5.24% at $4.62 at the time of publication Monday, according to Benzinga Pro.

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