u/PlungePool-GoldMiner

“For NIO, bringing in local state capital to own these assets marks a shift away from relying solely on corporate funding for infrastructure construction. Battery swapping networks are capital-intensive by nature; as the network expands, the demands on capital and operational efficiency only intensify.”

“The Wuhan project is therefore more than a simple site handover; it signals the further evolution of NIO's battery swapping business model toward a "separation of asset ownership and professional operation." Data from NIO shows that NIO Power has already partnered with over 40 local state-owned platforms and financial institutions across 25 provinces and regions, bringing more than 800 swap stations into operation.”

I was looking at the current price-to-sales multiples of the three Chinese EV names that have traditionally been compared with each other:

NIO — ~0.84x P/S
Li Auto — ~0.80x P/S
XPeng — ~1.18x P/S

XPeng really sticks out. The market is currently paying roughly 40% more for each dollar of XPeng revenue than each dollar of NIO revenue.

So I went back and compared their latest Q1 2026 results.

NIO — Q1 2026
Revenue: RMB25.53B (~US$3.70B)
Revenue growth: +112.2% YoY
Gross margin: 19.0%
Vehicle margin: 18.8%
GAAP net loss: RMB332M (~US$48M)
Deliveries: 83,465

XPeng — Q1 2026
Revenue: RMB13.03B (~US$1.89B)
Revenue growth: -17.6% YoY
Gross margin: 20.6%
Vehicle margin: 12.1%
GAAP net loss: RMB1.78B (~US$258M)
Deliveries: 62,682

I’m not knocking XPeng. I owned it myself, and its autonomous driving, robotics, ARIDGE/eVTOL and Volkswagen relationships give it legitimate technology optionality. But those numbers make the valuation difference interesting.

NIO generated almost 2x XPeng’s Q1 revenue, grew revenue 112% YoY versus XPeng declining 18%, had a substantially higher vehicle margin, and lost about US$48M versus XPeng’s ~US$258M.

NIO’s profitability trajectory has also changed dramatically:

Q1 2025 — lost ~US$930M
Q2 2025 — lost ~US$697M
Q3 2025 — lost ~US$489M
Q4 2025 — made ~US$40M
Q1 2026 — lost ~US$48M

So NIO isn’t consistently profitable yet. It has only produced one actual GAAP-profitable quarter.
But going from a ~$930M quarterly loss to roughly breakeven one year later while vehicle margin increased from 10.2% to 18.8% is a significant change.

Which brings me back to the valuation:
NIO — ~0.84x sales
XPeng — ~1.18x sales

What exactly justifies XPeng receiving roughly a 40% higher multiple on revenue today?
Maybe XPeng deserves a premium for its AI/robotics/technology pipeline.
Maybe NIO deserves a discount until it proves profitability is sustainable.
But NIO also has GeniTech/Shenji, proprietary silicon, WorldModel, BaaS, its Power/swap infrastructure, ONVO and Firefly alongside the premium NIO brand.

I’m not arguing NIO deserves some crazy 2021 valuation again.

NIO trades around 0.84x sales versus roughly 1.18x for XPeng. Given NIO’s recent margin improvement and near-breakeven results, do you think the market is still undervaluing NIO relative to its peers?

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Quick correction to what I posted earlier this morning.

Goldman Sachs did not simply upgrade NIO to Buy while leaving its $7 price target unchanged. According to the MT Newswires item shown through Schwab,

Goldman:
Upgraded NIO from Neutral to Buy
Raised the price target from $6.60 to $7.00
Published the change on July 13, 2026
The target increase itself is modest—about 6%—so the important part is the rating change.

Goldman has historically been one of the more skeptical firms covering NIO. They have not exactly been cheerleaders for the company or the bull case. That makes the move from Neutral to Buy more meaningful than another bullish firm simply reiterating an existing position.

I also think some of the reporting caused confusion because articles referred only to the new $7 target, making it sound as though the target had already been $7 and was unchanged. The Schwab headline specifically states:
Goldman Sachs upgrades NIO to Buy from Neutral and adjusts its price target to $7 from $6.60.

My interpretation: Goldman is becoming more confident in the 2026 operating story—particularly stronger premium SUV demand, improving product mix, and a more credible path toward profitability and free cash flow.

That does not mean NIO has solved everything. They still need to:
Stop launching overlapping models that cannibalize one another
Give NIO, ONVO and Firefly clearly differentiated roles
Prove ONVO can generate profitable volume
Reduce cash burn and fixed-cost expansion
Turn their technology investment into better margins and a stronger moat
Deliver sustained profitability rather than one quarter of accounting improvement

A this is still a noteworthy change. A firm that has generally been cautious or bearish on NIO is now willing to put a Buy rating on it.
Correction summary: the prior target was $6.60, not $7. The new target is $7.00.

A few days ago, I argued that NIO should simplify its lineup and stop spending shareholder capital on overlapping mid-level models that ONVO can serve more efficiently.

The clearest candidates are the EC6, ES7 and EC7. Buyers focused on value, family space and practicality can already be served by the ONVO L60, L80 and L90, while buyers who truly want the premium NIO experience can move up to the ES8 or ES9.

The ES6 is more debatable. NIO may still need one gateway premium SUV, but it should not support several similar SUVs around it that compete with ONVO and with each other.
The ET5 and ET5 Touring are different. ONVO currently has no sedan or touring model that replaces them, and the ET5 Touring in particular still offers something distinctive. Those models should not be grouped with the redundant SUV SKUs.

The strategy should be simple: NIO focuses on premium, high-margin vehicles and takes customers from BMW, Mercedes and Audi. ONVO handles the broader family market. Firefly handles compact vehicles and international expansion.

NIO does not need dozens of overlapping models. It needs a smaller lineup with clearer brand separation, stronger margins and better returns on shareholder capital.

“Goldman Sachs upgraded (NIO) to Buy from Neutral with a $7 implying 46% upside in the shares. Goldman expects Nio to post among the fastest volume growth in its coverage with a “premium” margin profile. The company should see a “strong” profit and free cash flow turnaround in 2026, the analyst tells investors in a research note. Goldman believes Nio’s “successful turnaround” with the launch of new ES8 and ES9, in addition to a strengthening position in the premium new energy vehicle market, creates a “higher competitive moat and is more difficult to displace by competitors.” It sees an attractive valuation at current share levels”

Surprised this has not been posted yet.
Goldman Sachs analyst Tina Hou upgraded NIO from Neutral to Buy while maintaining a $7 price target, which implies roughly 46% upside from the price used in the note.

The historical context is what makes this interesting.

Goldman downgraded NIO to Sell in November 2024 with a $3.90 target, citing weak order momentum, slow production and delivery ramps, limited new-model launches, and intensifying price competition. Goldman then upgraded NIO from Sell to Neutral in June 2025 as cost reductions began improving the setup. In October 2025, Hou raised the target to $7 but still kept the stock at Neutral. This new July 2026 note completes the move from Sell to Neutral to Buy.

The timing is notable because this comes immediately after NIO missed its Q2 delivery guidance and the stock was punished. Goldman appears to be looking past that credibility miss and focusing on the underlying operating setup.
According to reports summarizing the note, Hou points to:

The successful turnaround driven by the new ES8 and ES9
Stronger NIO brand power in the premium NEV market
One of the fastest expected volume-growth rates in Goldman’s coverage
A premium margin profile
A strong profit and free-cash-flow turnaround in 2026

That does not erase the guidance miss. Management still needs to stop overpromising and underdelivering. But a historically cautious Goldman analyst turning bullish after the miss is more meaningful to me than a longtime bull simply raising a target.

Hou covers China autos, including NIO, XPeng and Li Auto, so this is a relative industry call, not just a generic EV recommendation. The most interesting part is that Goldman now appears to see NIO’s premium ES8/ES9 strategy, margin trajectory and valuation as outweighing the execution risk.

Source: ⁠Goldman Sachs upgrades NIO to Buy with $7 price target

I’m curious how others see NIO’s product strategy from here.

China’s auto market is no longer an easy growth market. Domestic sales have been weak for months, NEV retail has been under pressure, and the market is now more about taking share than riding a rising tide. NIO also does not have a strong enough export engine yet to offset that domestic pressure.

Because of that, I think NIO needs to simplify and focus capital where the brand actually has pricing power.

To me, the strongest lane for the NIO brand is premium BEV, specifically ES8 and ES9. That is where NIO can take share from buyers who historically would have looked at Mercedes, BMW, and Audi, including premium ICE buyers moving into EVs. I’m talking about buyers cross-shopping vehicles like BMW X5/X7, Mercedes GLE/GLS, Audi Q7/Q8, and the German BEV equivalents. In the BEV era, engine heritage matters less. Software, cabin tech, comfort, ADAS, battery experience, BaaS, and swap convenience matter more. That is where NIO actually feels differentiated.

The middle-market NIO models are the problem. ES6, EC6, ET5, ET5 Touring, etc. made more sense before ONVO existed. But now ONVO exists specifically to fight the crowded family EV market. So why keep spending shareholder capital refreshing and supporting mid-level NIO SKUs that are not clearly selling well enough?

My view: NIO brand: ES8 and ES9, premium BEV, high ASP, margin, brand status, taking share from Mercedes/BMW/Audi ICE and BEV buyers.

ONVO: L60, L80, L90, mainstream family EVs, competing with Model Y, XPeng, BYD, Geely, Zeekr, Xiaomi, etc.

Firefly: entry, urban, and eventual export optionality.

NIO does not need ten “pretty good” models in a mature market. It needs fewer models that define the brand, protect margins, and reduce cash drag.

Wasn’t this basically NIO’s original direction anyway? A premium Chinese EV brand that could compete with legacy luxury?

Now that ES8 and ES9 appear to be working in that premium lane, why not embrace it? Focus the NIO brand where it has pricing power and let ONVO fight the middle market.

Curious what others think. Should NIO keep refreshing the broader legacy lineup, or focus the main brand on premium BEV leadership and phase out weaker middle-market SKUs over time.

I will up all night waiting for the press release.