We recently published a list of 10 Most Oversold EV Stocks to Buy According to Analysts. In this article, we are going to take a look at where NIO Inc. (NYSE:NIO) stands against other most oversold EV stocks to buy according to analysts.

As per PwC, the race for EV adoption has been heating up, thanks to the tailwinds such as consumer interest, robust buy-in by automakers, and accelerated government funding. The electric transportation saw strong support from the 2021 Infrastructure Investment and Jobs Act – which finances $7.5 billion in EV charging infrastructure. Furthermore, the Inflation Reduction Act offered tax credits for new and used electric passenger and commercial vehicles.

What’s Next for EV Market?

As per Research and Markets, the EV market is anticipated to reach US$1.58 trillion in 2033 from US$600.13 billion in 2024. The growth is expected to be aided by increased public awareness, the requirement for reducing emissions, developments around battery technology, supportive government policies and incentives, and strong investments in renewable energy sources.

Governments and consumers continue to adopt EVs as a cleaner alternative to conventional ICE vehicles because of elevated concerns regarding environmental sustainability and the requirement to reduce greenhouse gas emissions, according to Research and Markets. Additionally, improvements in the electric car range, together with charging infrastructure due to battery technological developments, have been fueling industry expansion.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Factors to Support EV Transition

As per Dentons, the Polycentric Law Firm, emerging markets (EMs) continue to be central to global EV adoption, courtesy of increased urbanization, government incentives, and economic growth. Notably, the investments in EV infrastructure and battery technology have been fueling wider adoption. Furthermore, local manufacturing and innovation, including cost-effective EVs and off-grid charging stations, have been bolstering economic development in local EV industries of EMs.

The flexible manufacturing platforms continue to support OEMs in adapting more efficiently to fluctuating market dynamics, like regulatory changes and changes in consumer preferences. Dentons believes that alliances with Chinese EV makers are expected to allow legacy OEMs to use advanced EV technologies, cost-efficient production methods, and well-established supply chains provided by Chinese OEMs. This can help facilitate the transition of legacy OEMs to electrification. Overall, 2025 might need flexibility, innovation, and adaptation in the broader automotive industry amidst economic pressures and evolving consumer expectations. Through using the advancements in EVs, Software-Defined Vehicles (SDVs), and manufacturing technologies, OEMs can place themselves well in the highly competitive and dynamic market.

Our Methodology

To list the 10 Most Oversold EV Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the companies catering to the broader EV sector.  Next, we chose the ones that have declined significantly over the past year and that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 21. We also mentioned hedge fund sentiments around each stock, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A fleet of eco-friendly electric cars, a symbol of the company's commitment to sustainability.

NIO Inc. (NYSE:NIO)

% Decline Over 1 Year: ~23%

Average Upside Potential: ~39.7%

Number of Hedge Fund Holders: 20

NIO Inc. (NYSE:NIO) is engaged in designing, developing, manufacturing, and selling smart electric vehicles in China. The company’s introduction of new brands such as ONVO and Firefly reflects a strategic move to capture a significant market share of the Chinese EV market. Through the expansion beyond premium positioning, NIO Inc. (NYSE:NIO) possesses the potential to grow into broader consumer segments and significantly enhance the addressable market. The company delivered 13,863 vehicles in January 2025, implying a 37.9% growth YoY.

The deliveries included 7,951 vehicles from its premium smart EV brand, NIO, and 5,912 vehicles from its family-oriented smart EV brand, ONVO. Notably, the official launch of the Firefly model is anticipated in April 2025. The multi-brand strategy can enable NIO Inc. (NYSE:NIO) to leverage its existing technological expertise and brand reputation throughout various price points and vehicle categories. By providing a wider range of products, NIO Inc. (NYSE:NIO) can attract a more diverse customer base, which can enhance its market penetration. Its experience in the premium segment can provide a competitive edge in providing high-quality vehicles at accessible price points. This can differentiate the company from its competitors.

Overall, NIO ranks 5th on our list of most oversold EV stocks to buy according to analysts. While we acknowledge the potential of NIO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than NIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.