Why Nio Stock Soared This Week

Key Points

• Nio's monthly sales hit a new record in August.

• Management took advantage of a sharply rising share price to raise capital.

• Nio's Onvo brand is contributing to its sales gains.

• 10 stocks we like better than Nio ›

Stocks generally don't perform well when a company announces it is raising capital through an equity offering. But the stock of Chinese electric vehicle (EV) maker Nio (NYSE: NIO) has surged this week on the heels of one such announcement.

Nio's American depositary shares (ADSes) have surged nearly 20% this week, as of Friday morning, according to data provided by S&P Global Market Intelligence.

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The move came after a string of what investors are considering good news from Nio.

Nio recently launched its Firefly and Onvo brands. Image source: Nio.

Nio hits sales record

On Sept. 1, Nio reported a record 31,305 monthly EV deliveries in August. That was its highest monthly sales volume ever, beating the previous mark of 31,138 in December 2024. Those are the only two months with sales exceeding 30,000 units.

Shares took off following that news. Nio stock has skyrocketed 50% in just the last month. That led management to announce a new equity offering that raised more than $1 billion. While that dilutes existing shareholders, it is being viewed as a long-term positive for Nio's business. That's because the EV maker is at an inflection point with more sales records likely ahead.

The August record was largely due to sales of Nio's new mass-market brands. Firefly and Onvo were launched last year, and represented two-thirds of its August vehicle deliveries. Nio also just revealed its updated Onvo L60 crossover SUV with deliveries beginning in October. The L60 was the first product from the Onvo brand, aimed at families focused more on value and practicality than luxury.

That could spark a new wave of sales gains by Nio. It seems investors this week want to own shares ahead of seeing new sales records being reported.

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Howard Smith has positions in Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.