Nio stock price has slumped in the past few years, becoming one of the worst-performing electric vehicle companies in China. It has dropped by 26% in the last 12 months and 93% from its highest level in 2021. This article explains why the Nio share price is ripe for a 75% surge in 2025.
Nio stock price has strong technicals
The main reason why the Nio share price has room for more upside is that it has strong technicals. On the daily chart, we see that the stock has formed a falling wedge chart pattern, which is characterized by two falling and converging trendlines. These two lines are now nearing their confluence levels, where a bullish breakout typically happens.
The Nio share price has also formed a bullish divergence pattern. The Percentage Price Oscillator (PPO), a unique type of MACD, has moved upwards and is about to crozz the zero line. Additionally, the Relative Strength Index (RSI) has continued moving upwards and has formed an ascending channel.
Therefore, these factors may explain why the Nio share price will soon surge. A strong rebound will see the stock surge to the next key point at $7.70, its highest level in September last year, which is about 73% above the current level.
A drop below the lower side of the wedge pattern at $3.97 will invalidate the bullish view. It will signal that there are more gains in the coming months, with the next point to watch being at $3.70, its lowest point in August last year.
Potential catalysts for the Nio share price
There are numerous catalysts for the Nio stock price this year. First, there are signs that the Chinese economy is doing relatively well, helped by the stimulus by Beijing’s authorities. The most recent data showed that China’s economy expanded by 5.4% in the fourth quarter and by 5.0% for the full year.
This economic recovery may continue this year now that the PBoC is focused on cutting interest rates. Analysts are predicting about 2 rate cuts this year, a move that will make the borrowing costs cheap for the Chinese.
Second, Nio’s business is still seeing strong growth even as the electric vehicle industry gets highly crowded. The most recent monthly deliveries data shows that the firm delivered 13,863 vehicles in January this year, up by 38% from the same period a year earlier. Most of these deliveries were from the NIO brand, while the newly launched ONVO had a strong performance.
Analysts anticipate Nio revenue growth to continue
Third, Nio’s financial results show that the company’s business is doing well. Wall Street analysts believe that Nio’s revenue for 2024 will be 68 billion RMB or about $9 billion, representing an annual growth rate of 23%. They also expect that its revenue in 2025 will be 97 billion RMB or 42.7% annual growth.
These are strong numbers considering that other EV companies are not doing well. For example, Tesla revenue dropped in 2025, as competition with the likes of BYD and Huawei jumped.
Additionally, NIO has a strong balance sheet after raising cash last year. This means that its balance sheet will help it to offset its substantial losses. Just recently, the management completed the repurchase right on its 0.50% convertible senior notes worth about $378 million.
Further, the company has more room to grow internationally because of its quality vehicles that are of a lower price. The potential markets are in Europe, Latin America, and Southeast Asian region.
Nio is also fairly undervalued compares to other EV companies. It has a price-to-sales ratio of 0.99, lower than Tesla’s 11.8 and Lucid’s 2.88.
Read more: Tesla’s former board member calls the stock a ‘sell’—here’s why
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