NIO shares are bouncing back amid ramped up production. Is now the time to buy?
Andy Feng

Shares of Chinese EV maker NIO (NYSE:NIO) have been gaining ground in recent weeks as production ramps up in the wake of Shanghaiâs tough COVID-19 lockdowns. The advance has allowed the stock to recover from a 52-week low set a little more than two months ago.
However, even with the rebound, the stock still faces headwinds. The COVID situation in China remains fluid and EV shares in general remain under a cloud amid rising interest rates and fears of a global recession. Given these crosscurrents, is now the time to buy?
Recovering from COVID
NIO shares have climbed 8% over the past 30 days, largely in tandem with its US-listed Chinese EV peers, with shares of Li (LI) rallying 17%, while XPengâs (XPEV) have jumped 10%. U.S.-based Tesla (TSLA), in comparison, has seen its shares rise 6%.
NIOâs stock got a boost on June 21 amid reports that the Chinese government was looking at ways to help support EV production and encourage consumer uptake. Investors were also encouraged by news that NIOâs hometown of Shanghai was finally emerging from weeks of lockdowns triggered by an outbreak of COVID-19.
The shares hit a speed bump on June 29, however, after short seller Grizzly issued a scathing report about the company. Last week, NIO announced it had assembled an independent committee to look into allegations contained in the report, which NIO said was misleading and riddled with inaccuracies.
The stock jumped again on July 7 after NIO unveiled plans to expand its battery charging and swapping services, followed by news that the Chinese government intends to extend certain subsidies and tax breaks for EVs in that country.
Another encouraging sign for investors has been the recent jump in car deliveries, which had been significantly constrained earlier in the year by the COVID lockdowns and supply chain disruptions. On July 1, the EV maker reported that June deliveries soared 60% over the same period in 2021 to 12,961. The automaker had reported 7,024 deliveries for May.
NIO also plans to help keep down battery costs by producing high voltage batteries internally, much like rival Tesla. The company said in June that it will begin making 800-volt battery packs, which are generally seen in higher performance EV vehicles such as Porscheâs Taycan, during the latter half of 2024.
Is NIO a Buy?
Even with the recent bounce back, Nio (NIO) remains significantly lower for 2022. The overall slide in more speculative names, which weighed heavily on the EV space, sent the stock spiraling earlier in the year. 
The stock, which topped $60 in early 2021, has declined from a 52-week high of $47.38 set in the middle of last year. NIO reached as low as $11.70 in May before its recent rebound. In Monday's intraday trading, shares sat at $21.21.
Wall Street analysts, on average, rate NIO a Strong Buy. Of the 26 analysts tracked by Seeking Alpha, 15 had a Strong Buy rating, while nine more had issued a Buy opinion. Two experts have declared a Hold rating and none see the stock as a Sell. SA authors have rated it a Buy, on average.
However, Seeking Alpha's Quant Rating have a more cautious view, labeling the stock as a Hold. While the company earned a B+ for growth and a B- for momentum, it also received a C for revisions, a D for profitability and an F for valuation, as of July 15.
Morgan Stanley said in a noted dated June 17 that it saw the companyâs stock performance likely hinging on âmarginal operational improvements and market expectations,â areas where the firm believed NIO had lagged behind its peers during the first half of the year.
âHowever, looking into 2H, with contributions from a stronger model cycle starting to kick in, we believe volume bounces should enable NIO to outperform peers in the near term,â Morgan Stanley added, while maintaining its Overweight rating on the stock.
For a more in-depth look at NIO, check out Seeking Alpha contributor Mobility Matters Researchâs âNIO June Deliveries Show Continuing Weakness and a Glimmer of Hopeâ or fellow SA contributor The Asian Investorâs âNIO: June Deliveries Show Growth Making a Comebackâ.