Nio (NIO) shares rose more than 13% on Tuesday after the Chinese electric vehicle company posted its first quarterly profit of 282.7 million yuan ($41.11 million).
In the earnings release, the company said record fourth-quarter deliveries of 124,807 vehicles provided the scale needed to boost revenue to $4.95 billion, while vehicle margins rose to 18.1%.
NIO stock is now up about 25% from its year-to-date low, but there is still reason to believe it will rise in 2026 as the “Tesla of China” proves its business can scale sustainably.
On Tuesday, the board also approved a major stock-based incentive plan for CEO William Li, granting him nearly 249 million restricted shares, making Nio stock even more attractive to own in 2026.
Because? Because it’s not just a payday. This huge award is strictly tied to “aggressive” operational milestones, including maintaining annual sales growth between 40% and 50% over the next three to five years.
By aligning Li’s personal wealth with high-speed growth and annual profitability targets, NIO has sent a clear signal to the market: leadership is “committed” to ambitious expansion and fiscal discipline.
NIO stock remains attractive to long-term investors, given the successful integration of mass market Onvo and budget Firefly brands that have effectively tripled their addressable market.
These new launches allow the Chinese electric vehicle company to capture volume without diluting the premium status of the flagship brand.
Financially, the company’s “third phase of development” is marked by declining losses and a healthy cash reserve of more than $5 billion, providing a buffer against an ongoing price war between Chinese automakers.
With a price-to-sales (P/S) multiple of approximately 1.04 times (a discount to its historical averages), Nio’s infrastructure leadership (with over 3,700 battery swapping stations) acts as a huge competitive moat that is difficult to replicate.
Note that Wall Street analysts also remain bullish on Nio stock, especially since it broke above its 20-day moving average (MA) at the $4.98 level on Tuesday morning.