Nio (NYSE: NIO) shares have been soaring this week. China has a plan for accelerating growth, and the electric vehicle (EV) maker could be one big beneficiary. But even prior to China’s economic stimulus making an impact, there are signs that Nio’s business is getting in better shape.

Investors recognized that this week and pushed Nio shares up by about 24% as of late morning Friday, according to data provided by S&P Global Market Intelligence.

Green shoots for EV demand

U.S.-listed Chinese stocks got a big boost this week when China’s central bank eased monetary policy and provided fiscal support for businesses and consumers. Steps taken to increase lending, support the real estate market, and provide homeowners more spending money should give the strong EV market even more of a tailwind.

Chinese consumers will get a break on existing mortgages and those savings might be spent on the popular domestic electric vehicle offerings. With the government also promising to aid the struggling property sector and increase fiscal support if necessary, investors are trying to get into EV names ahead of improving business results.

Nio has already announced deliveries of over 20,000 vehicles in each of the last four months for the first time. Investors are hoping to see that streak extend when the company reports September results next week.

At least one Wall Street analyst who follows EV leader Tesla is thinking that company will exceed expectations when it reports its third-quarter deliveries next week. In a Friday report, Wedbush analyst Dan Ives said his firm believes Tesla will report up to 470,000 EV deliveries for the quarter. Overall expectations are for 460,000 units.

Last year about one-third of Tesla’s vehicle sales came from China. Its Shanghai factory is its largest. A rebound from a slower first half of the year would bode well for Nio, too. If China does rebound, Nio stock might have more room to run even after its sharp spike this week.

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Howard Smith has positions in Nio and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Why Nio Stock Surged More Than 20% This Week was originally published by The Motley Fool