NIO Stock Finds Support as Recent Rally Takes a Breath

Nio Inc. (NYSE:NIO) shares are exhibiting resilience, holding the $7 support level despite a recent pullback, suggesting a pause in what has been a strong recovery for the electric vehicle (EV) maker. This consolidation follows a period of significant gains, with the stock price appreciating approximately 87% over the past six months, a notable turnaround from a previous period where shares declined substantially.

The stock experienced a 4.35% dip on Friday, but managed to maintain its footing around the $7 mark, before moving higher this morning (+1.4% pre-market). This price action occurs after Nio reached a new 52-week high of $7.71, fueled by positive operational results and an improved company outlook. The ability of the stock to hold above $7 indicates potential underlying strength and continued market confidence.

Nio's Q2 2025 financial results revealed a 25.6% year-over-year increase in vehicle deliveries, reaching 72,056 units. This surge in deliveries contributed to a total revenue of RMB19 billion, representing a 9% year-over-year growth and a substantial 57.9% quarter-over-quarter increase. While the company reported a net loss of RMB4,994.8 million, its vehicle margin stood at 10.3%.

Analysts at Citigroup maintained a “Buy” rating on Nio on September 23rd, when the stock was priced at $7.07, reinforcing positive sentiment surrounding the company.

Strategic partnerships have played a crucial role in Nio's recent performance. The collaboration with CATL to develop a battery swapping network, supported by CATL's investment of up to 2.5 billion yuan ($345.6 million) in Nio Power, is expected to enhance Nio's competitive edge. Furthermore, discussions regarding CATL potentially acquiring a controlling stake in Nio's power unit signal a deeper integration and commitment to expanding battery swapping infrastructure.

Nio's product expansion efforts are also noteworthy. The introduction of the Firefly, a battery-electric subcompact hatchback, and the Onvo L90, a full-size crossover SUV, broaden Nio's market appeal. Coupled with plans to enter 16 new markets across five continents in 2025, Nio is actively pursuing global growth.

To support these ambitious plans, Nio completed a $1.16 billion equity offering in September 2025. While this resulted in approximately 12% shareholder dilution, it provides the necessary capital for research and development, vehicle platform development, and infrastructure expansion.

Despite these positive developments, Nio faces significant market challenges. The Chinese EV sector is grappling with overcapacity, stagnating domestic demand, and intense price wars. In response, Nio has implemented price reductions across its lineup, which could impact profit margins. Additionally, tariffs imposed by the European Union on Chinese battery electric vehicles have led to delays in Nio's European expansion plans.

The near-term outlook for Nio hinges on its ability to navigate these challenges while capitalizing on its strategic partnerships and product innovations. The company's focus on battery swapping technology, coupled with its expansion into new markets, positions it for potential growth.

The market's reaction to Nio holding the $7 level suggests a belief in the company's long-term prospects, even amidst industry headwinds. This support level could serve as a crucial indicator of future price movements and overall market sentiment towards Nio.