Shares of China's automotive giant, NIO, have experienced a significant decline of almost 60% year-to-date. The intense competition in the electric vehicle (EV) market in China, coupled with a slowdown in global EV demand and tariffs in Europe, has posed challenges to the company's ambitious goals. However, despite these setbacks, analysts maintain a cautiously optimistic stance on NIO's stock, predicting a potential upside of 35% over the next 12 months.

NIO, a prominent Chinese automotive firm known for its premium smart EVs, recently announced its July delivery update, remarkably surpassing the milestone of 20,000 sold vehicles for the third consecutive month. In July, the company sold 20,498 vehicles, marking a slight decrease of 3.35% compared to the previous month, but still recording a modest year-over-year increase of 0.18%. From January through July, NIO delivered 107,924 EVs, reflecting an impressive 43.9% increase compared to the same period last year.

In contrast, another major player in the Chinese EV market, BYD Co. Limited, witnessed a 10% month-over-month decline in EV sales, with 130,000 units sold in July. These numbers highlight NIO's resilience and ability to maintain a strong market presence despite the challenging circumstances.

Looking ahead, NIO is preparing for the upcoming deliveries of the Onvo L60 SUVs in September. This lower-priced, mass-market SUV model is expected to compete with Tesla's Model Y and is projected to significantly boost the company's sales. Analysts believe that this new offering will serve as a catalyst for NIO's potential rebound.

Among the recent ratings received by NIO's Hong Kong-listed shares in June, two analysts maintained Hold ratings, while one analyst recommended a Buy. Jefferies and Macquarie, the analysts who advised on Hold ratings, predict an upside potential of 35% and 40%, respectively. On the other hand, analyst Rachel Miu from DBS remains optimistic about NIO's stock, issuing a Buy rating. DBS expects an improvement in the company's vehicle margin in FY24 to 13.5% from 9.5% last year, driven by higher sales and a more stable cost structure. Miu also anticipates the Onvo L60 SUV to significantly boost the company's sales in the fourth quarter, projecting NIO's sales volume to reach 216,000 in FY24, representing a 35% year-over-year increase.

In general, analysts on TipRanks have assigned a Moderate Buy rating to NIO's stock, with a consensus price target of HK$41.25. This target implies an upside potential of 37.7% from the current price level, further reinforcing the cautiously optimistic sentiment for NIO's future performance.