Investing in Chinese electric vehicle (EV) makers such as Nio (NYSE: NIO) is an intriguing option. Heavy government subsidies have led to rapid advancement in battery technology and bringing down costs, which makes for an incredibly competitive EV market in China. In fact, China’s market is so far ahead of the U.S. that over half its new vehicle sales were EVs in July.

The good news for Nio investors is that the company has momentum and could be about to shift into a higher gear. Let’s see what’s ahead.

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Nio has quietly put together a few months of strong delivery numbers. In fact, for six straight months, Nio has delivered over 20,000 vehicles. Nio delivered 20,976 vehicles in October, which was a 30.5% gain from the prior year.

But the biggest takeaway from the October results was early Onvo deliveries. The Nio brand sold 16,657 vehicles in October, while its “family oriented smart vehicle brand,” Onvo, delivered 4,319 in its first full month of sales. After launching the mid-size Onvo L60 in September, management noted that production and deliveries would steadily ramp up.

At the end of October, Nio had 166 Onvo centers and spaces across 60 cities with plans to expand its network to drive growth. Nio’s Onvo L60 is a good bet for that growth and could shift the company into higher gear. The new electric SUV starts at roughly $21,200 and is aimed directly at competing with rival Tesla‘s Model Y.

Not only will the Onvo L60 help shift Nio’s deliveries into higher gear, it’s just a stepping stone to what could be an even bigger hit among consumers. Nio CEO William Li commented: “If you think the L60 is good, then this new model is a much more competitive product.” Currently, the plans are for Onvo to launch a new EV every year, with the new mid- to large-size electric SUV due next year.

Nio isn’t stopping with Onvo. It has plans to launch another, more affordable, sub-brand named “Firefly” late in 2024. In a Chinese market where EVs represented over 50% of new vehicle sales in July — and which is craving affordable EVs — Nio’s launch of Onvo and Firefly should really kick the company’s deliveries into a higher gear. We’re seeing evidence of that as recently as October production and delivery figures.

The good news is that Nio recently announced a cash injection from a group of investors putting up roughly $1.9 billion to help fund its expansion and growth. The collection of strategic investors will invest roughly $471 million in Nio China, while Nio the parent company has agreed to pour in roughly $1.43 billion in cash to subscribe to the newly issued Nio China shares.

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