Why Nio Stock Is Soaring: Tesla Rival's Latest EV Gets Nvidia "Al Brain" With EV Sales Due.

NIO Inc $NIO Inc (NIO.US)$ . skyrocketed in September for their best month since June 2020. It'll report monthly and third-quarter deliveries on Tuesday, with Li Auto $Li Auto (LI.US)$ and ZEEKR $ZEEKR (ZK.US)$ already reporting record deliveries.

On Monday, Nio stock rose after the Tesla $Tesla (TSLA.US)$ Motors challenger announced a big cash injection for its Nio China unit.

Further, China stocks rallied broadly in late September on Beijing's latest stimulus measures. China's central bank lowered interest rates to push economic growth toward a target of around 5%. This year, China plans to issue sovereign bonds worth about RMB 2 trillion ($284 billion) to stimulate the economy, reports said. On Sunday, the central bank ordered banks to lower rates on existing mortgages.

And not least, Nio has just begun deliveries of the Onvo L60, a more affordable Model Y rival that leverages NVIDIA Corp's $NVIDIA (NVDA.US)$ artificial intelligence (AI) chips.

China EV Sales
China's EV makers are disclosing September and Q3 sales.

Li Auto delivered a record 53,709 EVs in September, up 48.9% vs. a year earlier and 11.6% vs. August. Q3 deliveries totaled 152,831, up 45.4% vs. a year earlier.

Zeeker delivered a record 21,333 EVs in September, up 79% vs. a year earlier and 18.4% vs. August. Q3 sales were 55,003, also an all-time best and up 51.1% vs. a year earlier.

Nio Onvo EV Powered by Nvidia AI Chip
"Nvidia Drive Orin serves as the AI brain of Onvo's smart-driving system," Nvidia, which has long partnered with Nio on chips to automate driving tasks, said in a Sept. 27 press release. The latest Drive Orin system-on-a-chip can perform 254 trillion operations per second, processing sensor data from the L60's high-definition cameras and four-dimensional radar. The automotive-grade AI chip enables "highly automated driver assistance and autonomous driving systems," according to the release.

"With the integration of Nvidia Drive, the Onvo L60 is poised to deliver an advanced driving experience at an affordable price," the chipmaker said.

Nio has pitched the L60 as a higher-spec, lower-priced rival to the Model Y. The L60 starts as low as RMB 149,900, or $21,000, without a battery. Users can opt for Nio's battery-as-a-service service. With an EV battery, the L60 starts at RMB 206,900.

Deliveries of the first vehicle from Nio's new and cheaper Onvo sub-brand began Sept. 28. It's expected to have a modest impact on September sales. But given the heavy L60 orders and Nio ramping up production, the new crossover should provide a big sales boost in October and beyond.

The Model Y, Tesla's bestselling electric vehicle by far, starts around $35,000 in China after price cuts. That Tesla model is being challenged by several existing and forthcoming Chinese EVs, including options from XPeng Inc., Li Auto and Zeekr.

The EV startups are all set to release September and Q3 sales data on Tuesday, along with Nio stock. EV giants BYD Co., Ltd. and Tesla will report global EV sales this week as well.

Electric cars now account for more than half of new car sales in mainland China, as a brutal price war continues. Only two U.S.-traded Chinese companies — BYD and Li Auto — are profitable, despite rising EV sales.

Nio Stock, Tesla Stock, China EV Stocks
Shares of Nio rose 2.5% to 6.68 on the stock market today, closing near the bottom of the day's range. Nio stock jumped 66.4% in September, recovering the 10-week and 40-week moving averages. That's after trading near four-year lows in August.

The Nio surge in September outpaced gains of 51.6% for XPeng, 37.8% for Zeekr and 31.8% for Li Auto. On Monday, XPEV stock and Zeekr reversed lower, while Li Auto slashed gains to trade back below its 200-day line.

Month to date, shares of EV giants BYD and Tesla have jumped 17% and 22%, respectively.

On Sunday, Nio said it will receive an RMB 13.3 billion (around $470 million) cash injection for its Nio China unit. It expects "strategic investors" to provide RMB 3.3 billion of that injection. Nio itself will provide the rest, with its stake in Nio China reduced to around 88%, down from 92%, CNBC said.

The transactions are set to wrap up by year end.

Despite September's surge, Nio stock is down 26% in 2024 so far, as well as over the past 12 months.

Year to date, TSLA stock is up more than 5% with the Tesla robotaxi event due on Oct. 10. Shares are moving toward a 271 cup-base buy point.

BYD stock has rallied 28.5% in 2024. Shares cleared an early entry of 32 last week and flirted with a 13-month cup-base buy point of 36.27 on Monday.