NIO Inc ( NIO ) – ADR shares are trading higher Tuesday morning, building on recent momentum from product launches and a key analyst update. Here’s what investors need to know.

What To Know: The rally defies recent cautions from Chinese President Xi Jinping, who warned against excessive and uncoordinated investment in the nation's crowded electric vehicle (EV) sector, highlighting potential market inefficiencies.

The primary catalyst for NIO is the launch of its new mass-market sub-brand, Onvo. Its first vehicle, the L90 large family SUV, is priced aggressively from approximately $39,000 (RMB 279,900) to compete directly with rival Li Auto.

With customer deliveries slated to begin on August 1, investors are optimistic about the new model's potential to boost sales and capture market share in the competitive family segment.

Earlier in the month, Morgan Stanley analyst Tim Hsiao reaffirmed a Buy rating on NIO with a $5.90 price target. Hsiao cited the L90 rollout as a major catalyst that strengthens the company’s competitive position and signals strong execution.

While facing intense price competition, NIO's stock has gained 41% in the past month. The company is also preparing to launch its third-generation ES8 SUV, further bolstering its product pipeline for late 2025.

Key Data: According to data from Benzinga Pro, NIO has a current market capitalization of $10.85 billion. Technical indicators suggest the stock’s recent rally has been very strong, with its Relative Strength Index (RSI) standing at 80.

An RSI level above 70 is typically considered to be in ‘overbought’ territory, which can sometimes signal that a stock is due for a consolidation or pullback.

Furthermore, there is significant bearish sentiment from some investors, with short interest at a notable 11.66% of the company’s float. The days-to-cover ratio is 6.43, suggesting it would take over six days of average trading volume for all short sellers to cover their positions.

Price Action: According to data from Benzinga Pro, NIO shares are trading higher by 10.2% to $4.98 Tuesday morning. The stock has a 52-week high of $7.71 and a 52-week low of $3.02.

Read Also: General Motors Faces Tariffs Heat, Margins Shrink

How To Buy NIO Stock

By now you're likely curious about how to participate in the market for NIO – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of NIO, which is trading at $4.98 as of publishing time, $100 would buy you 20.08 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

Image: Shutterstock