Chinese electric vehicle (EV) maker Nio has extended its remarkable rally, with shares jumping 11% in Tuesday’s session, even as Morgan Stanley maintained a bullish stance despite the stock’s sharp gains in recent months.
The surge follows strong investor enthusiasm for the company’s newly launched ES8 SUV and robust early demand indicators.
ES8 launch boosts investor confidence
On August 21, Nio unveiled the ES8, a sport utility vehicle priced at 308,800 yuan ($43,000) under a battery subscription plan.
The model represents a more affordable entry point compared to Nio’s existing premium lineup, which ranges from 338,000 yuan to 768,000 yuan. Deliveries for the ES8 are scheduled to begin in late September.
The lower price point appears to have resonated with consumers.
Morgan Stanley analyst Tim Hsiao noted that pre-orders with a 5,000 yuan refundable deposit may have already surpassed 30,000 by the weekend following the launch.
According to Hsiao, feedback has been constructive enough to fuel market expectations that the ES8 could replicate the viral momentum of the L90 model released earlier this year.
If sustained, that could underpin a run rate of 40,000 to 50,000 units per month for Nio beginning in October.
Morgan Stanley holds overweight rating
Despite the sharp upswing in Nio’s share price — which has risen more than 90% since June, compared with a 9% gain in the Hang Seng Index — Morgan Stanley continues to hold an overweight rating on the stock.
Hsiao’s price target of $6.50 per share is only slightly above Friday’s close, leaving limited near-term upside from current levels.
In fact, today’s surge has made the stock shoot past the target, and it is currently trading at $6.76.
In a note to clients, Hsiao highlighted that Nio’s share price momentum has become “self-reinforcing,” as investors increasingly view market performance as tied to the company’s ability to finance its operations and pursue long-term strategic ambitions.
He added that the trading value of Nio shares has spiked in recent days, surpassing $2.5 billion over the past two sessions, equivalent to the stock’s cumulative trading value over the previous two weeks combined.
Investor sentiment turns more positive
Hsiao also pointed to a noticeable improvement in investor sentiment toward Nio.
While questions about the sustainability of the company’s recovery remain, he noted a decline in client concerns about underlying demand and execution risks.
Instead, investors are showing more interest in upcoming models, such as the L60 and L80 facelifts slated for early next year.
The combination of robust ES8 pre-orders, increasing trading volumes, and an improving perception among investors has helped propel Nio’s recent gains.
While the analyst community remains cautious about long-term demand conversion, the near-term rally underscores how quickly sentiment in the EV sector can shift.
For now, Nio’s stock — up more than 90% since June and surging another 11% today — continues to capture attention, both as a momentum-driven trade and as a potential beneficiary of China’s evolving EV landscape.
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