Why Nio's shares rose by 31% in August and more than 75% in just 2 months

Key Points

• Nio recently launched two vehicles at extremely competitive prices to gain market share.
• Its sub-brand Onvo accounted for 50% of Nio's total deliveries in August.
• Nio expects record deliveries for 2025.

The last few months have been dizzying for Nio investors. After an impressive rebound in July, shares of the Chinese electric vehicle manufacturer rose another 31% in August, according to data provided by S&P Global Market Intelligence.

This spectacular rise means that Nio's shares have increased an impressive 80% since July 1. The enthusiasm around the stock is centered on its recent launches.

On July 31, Nio launched its flagship SUV L90 from its sub-brand Onvo in China with a starting price of $36,940 including battery. The price for customers who choose the battery-as-a-service plan (BaaS) is significantly lower, below $25,000. BaaS is one of Nio's biggest competitive advantages, as customers can buy cars without batteries at much lower prices and choose to rent them.

On August 21, Nio surprised again by announcing equally aggressive prices for its new ES8, the flagship SUV of its main brand. The price of the new ES8 starts at just $50,000, 25% less than the previous version despite having larger dimensions and more features. With BaaS, the price is further reduced to only $43,000.

Between the two launches, Nio also started deliveries of its other sub-brand, Firefly, in Europe, with plans to enter six European countries before the end of the year.

Where are Nio's stocks headed?

For a manufacturer launching vehicles at such competitive prices, the main challenge is balancing prices and profitability.

At a press conference after the launch of the ES8, as reported by CnEVPost, Nio's founder and CEO, William Li, explained the low pricing strategy and admitted that it is now a matter of survival for the company against the competition. However, Li stated that the ES8 can still generate gross profit at its current price due to lower production costs.

Onvo seems to be fulfilling its function. Nio delivered a record 31,305 electric vehicles in August, with Onvo accounting for 52% of the volume. The Nio brand constituted 33% and Firefly the remainder.

Nio's total vehicle sales increased by 62% sequentially in its second quarter ending June 30, 2025, while its revenue grew by 60% to over $2.6 billion. Its net loss decreased by 26% sequentially to approximately $697 million.

With Nio projecting even greater deliveries for the third quarter and setting the pace for a record year, the stock could rise even further.

My personal vision is that Nio's strategy is risky but necessary in the competitive Chinese market. Sacrificing margins for market share could work in the short term, but eventually, they will need to demonstrate profitability. I am concerned that this price war may be unsustainable if they do not achieve economies of scale quickly.