NIO Is Standing Out Among Chinese EV Peers This Year: Is the Stock Still a Buy?

Chinese electric vehicle (EV) companies released their March deliveries yesterday, April 1. The world’s biggest market for new energy vehicles (NEVs) showed traction last month following the typical slowdown in the first two months of the year. Looking at individual players, BYD’s (BYDDY) deliveries fell by over 20% year-over-year (YoY) in March, marking the seventh consecutive month of sales decline for the company, which became the world’s biggest EV seller last year.

Li Auto (LI) reported a 12% YoY rise in March deliveries, riding strong momentum for its Li i6 SUV, which it launched in September 2025. XPeng Motors’ (XPEV) deliveries, however, fell by over 17% compared to the corresponding month last year.

Meanwhile, Nio’s (NIO) March deliveries jumped 136% YoY, which helped it nearly double its Q1 2026 deliveries. The company has impressed with its deliveries this year, and its Q1 deliveries came in ahead of the company’s guidance. Markets have also taken cognizance of its strong performance, and with gains of over 21% this year, it is outperforming Chinese EV peers like Li Auto and XPeng Motors as well as U.S. EV giant Tesla (TSLA). 

The outperformance is a welcome break for Nio, which has otherwise been a laggard. NIO peaked in early 2021 when its market cap surpassed $100 billion but closed in the red for four consecutive years between 2021 and 2024. However, it ended its losing streak last year, gaining around 17%, and has continued its good run in 2026 as well.

Why Has NIO Outperformed EV Peers in 2026?

To be sure, the macro environment has been far from perfect for Chinese EV companies. China has tweaked the subsidy for electric cars and now offers a 12% subsidy, which is capped at 20,000 yuan. Moreover, there has been a widespread selloff in markets amid the Iran war.

However, Nio has managed to outperform on the back of its strong operating and financial performance. It delivered its first-ever adjusted profit in Q4 2025, as management had guided. The company generated positive free cash flows in the quarter and ended the year with cash and cash equivalents of $6.67 billion. It wasn’t a mean achievement given the bloodbath in the startup EV space, where price wars have taken a toll on margins, and many companies continue to burn cash.         

While many of the Chinese EV companies, including market leader BYD, are struggling to grow deliveries after the subsidy policy was changed, Nio has been able to deliver strong growth. The divergence is in part because NIO's premium eponymous brand would still get the full 20,000-yuan subsidy, as under the previous regime. There would be an impact on the budget brand Firefly, but since the bulk of the company’s sales came from the premium NIO brand, it wouldn’t be as impacted as budget EV makers.

Moreover, Nio’s new models have been received well by the market, which has helped it grow its deliveries. The company forecasts a volume growth of between 40% and 50% this year, which looks encouraging considering the otherwise sorry state of the country’s automotive industry, where sales are expected to dip this year.

NIO has also been working on chips, and its subsidiary Shenji is developing its second chip and exploring third-party customers, including those in the automotive industry. These chips would also help NIO lower input costs as it transitions from Nvidia (NVDA) chips to in-house silicon. Nio’s valuation discount to Chinese EV peers also helped support the rally. The stock is still trading at a discount to XPEV and LI based on the forward price-to-sales multiple.

NIO Stock Forecast

Nio’s financial performance hasn’t been lost on the sell-side analyst community, and last month, three brokerages, namely Nomura, DBS, and HSBC, upgraded it to a “Buy” or equivalent. Overall, NIO is rated as a “Moderate Buy” by 15 analysts polled by Barchart, but the stock is trading near its mean target price.

However, I believe more target price hikes are coming for NIO if the company can continue to execute the way it has over the last couple of quarters and deliver profitable growth. I bought the dip in NIO earlier this year and continue to stay invested in the stock despite the recent rally and would consider adding more shares if the stock corrects amid the market meltdown.