If you’ve been along for the Nio (NYSE: NIO) investment ride since the beginning, it hasn’t been for the faint of heart. There have been wild ups and downs, bankruptcy rumors, and capital raises. Despite all the twists and turns, it was easy to buy into the early hype, especially considering China’s electric vehicle (EV) market is years ahead of the United States’ and Nio’s luxury vehicles are well-received by consumers.

Now, the company might be kicking things into a higher gear — let’s dig in.

What have you done for me lately?

Speaking of ups and downs, despite plunging 54% during the first half of 2024, Nio just turned in an excellent second-quarter earnings result. Here are some of the highlights before we look at how the company could shift into a higher gear.

Second-quarter vehicle deliveries checked in at 57,373 units, which was split between 32,562 premium electric SUVs and 24,811 premium electric sedans. Its vehicle deliveries result represented a staggering 143.9% increase year over year and a 90.9% increase from the first quarter of 2024.

The company’s vehicle margins checked in at 12.2% during the second quarter, comparing favorably to the prior year’s 6.2% mark and the first quarter’s 9.2% figure. Revenue totaled $2.4 billion, which marked a 98.9% year-over-year increase and a 76.1% jump from the first quarter. And perhaps best of all, its net loss narrowed 16.7% year over year to $694.4 million.

Nio’s CEO, William Bin Li, doesn’t expect the momentum to slow from its record second quarter delivery figure, saying, “The total delivery volume for the third quarter is expected to set another record, further solidifying and expanding market share.”

What’s next?

After Nio unveiled its second brand’s first model — the L60 — in May, the vehicles just started rolling off the assembly line, and deliveries will begin shortly. Even thought it’s just one model, it’s expected to be a huge step for the company as it hopes the L60 can attack Tesla‘s Model Y market share in China.

The Onvo L60’s price will undercut the Model Y by about $4,000 in China. The company is also opening over 100 Onvo stores soon, a move that should help drive the vehicle into consumer hands. The company hopes the Onvo brand will help drive its current sales momentum higher; NIO has delivered 128,100 vehicles through August, a 35.8% year-over-year increase.

Higher gear?

Not only is Onvo expected to help fuel Nio’s momentum, it could be only the first step in that push. Consider that an even more affordable Nio brand is on the way, named Firefly, which could challenge the industry with price tags between $14,000 and $28,000.

Story continues

Nio already has momentum, posted a strong second quarter, and has two brands poised to shift the company into a higher gear — investors today have good reason to be optimistic about the EV maker’s prospects in the months and years ahead.

Should you invest $1,000 in Nio right now?

Before you buy stock in Nio, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nio wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $708,348!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 16, 2024

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Nio Is About to Shift Into a Higher Gear was originally published by The Motley Fool