NIO Stock Soars Pre-Market on $1.9B Investment Boost: Retail Bets On Long-Term Growth

Shares of Chinese EV-maker Nio Inc (NIO) surged nearly 13% in Monday’s pre-market session as of 7:08 a.m. ET after the firm announced a total of RMB 13.3 billion (approximately $1.9 billion) investment in Nio China from strategic investors.

The strategic investors, which include Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment Co. and CS Capital Co., will invest an aggregate of RMB3.3 billion in cash to subscribe for newly issued shares of NIO China. At the same time, NIO will invest an aggregate of RMB10 billion in cash to subscribe for newly issued shares of NIO China.

Following the transaction, NIO will hold 88.3% of controlling equity interest in NIO China, while the strategic investors along with the other existing shareholders will collectively hold the remaining 11.7% of equity interest in NIO China.

Daiwa has reportedly kept a ‘Buy’ rating on the stock and said that the cash injections by existing shareholders is a positive development, given that the firm is still loss making as of the second quarter.

Meanwhile, Citi has reportedly raised the price target on Nio to $8.90 from $7 while keeping a ‘Buy’ rating on the shares. The firm raised its volume estimates through 2026 to price-in sector consumption trends and also increased the stock's multiple in the wake of the upcoming Tesla Robotaxi event and high car sales season in the fourth quarter.

Citi expects a potential near-term catalyst for the stock from Onvo’s order intake during Golden Week holiday, before promotion benefits end on Oct. 8. The brokerage believes if Onvo is successful, it may strengthen investors' confidence in the firm’s Firefly brand.

Following the announcement, retail sentiment on Stocktwits flipped into the ‘bullish’ territory (71/100) from the ‘extremely bearish’ territory (24/100). The move was accompanied by ‘extremely high’ message volumes.

Chinese EV stocks have recorded significant gains last week after China’s stimulus announcement but despite the rise, shares of Nio are still down over 22% this year. However, Stocktwits users with a ‘bullish’ view believe Nio is a long-term play.