Goldman Sachs upgrades NIO to Buy, sees 46% upside on strong EV growth outlook

Goldman Sachs upgraded NIO to Buy and raised its price target to $7, citing stronger deliveries, improving margins and a potential return to profitability and free cash flow in 2026  

NIO ES9

Goldman Sachs has turned bullish on NIO, upgrading the Chinese electric-vehicle maker to “Buy” from “Neutral” and lifting its price target to $7 from $6.60, a move that points to roughly 46% upside from last Friday’s close. In a research note, Goldman analyst Tina Hou said NIO is positioned to be one of the fastest-growing new energy vehicle makers in the bank’s coverage, supported by a stronger product cycle, improving margins and a potential turnaround in profitability and free cash flow in 2026.

The bank forecasts NIO’s 2026 deliveries to rise 43% year on year, while revenue is expected to increase 60%. It also projects a swing to non-GAAP net profit of RMB 1.6 billion ($235.98 million) in 2026, compared with a non-GAAP net loss of RMB 12.4 billion ($1.83 billion) in 2025. Free cash flow is expected to move from a net outflow of RMB 3.1 billion ($457.22 million) in 2025 to a net inflow of RMB 12.1 billion ($1.78 billion) in 2026.

Goldman’s more positive view comes as China’s broader NEV market shows signs of slowing. Data cited from the China Passenger Car Association showed China’s NEV sales fell 14% year on year in the first half of 2026, while NIO’s deliveries rose 67.4% over the same period. Goldman expects China’s overall NEV retail market to grow by only about 1% in 2026, leaving NIO to outperform through new model launches and improved delivery capacity.

The all-new ES8 and ES9 sit at the center of that growth thesis. Goldman said the two models currently account for about 39% of China’s premium new energy SUV segment, with their brand positioning, size and pricing expected to keep them competitive in the near term. The bank also noted that NIO has completed continuous product upgrades over the past four quarters, strengthening the competitiveness of its lineup.

Goldman expects that product-renewal strategy to extend to the 5 Series and 6 Series models, with further generational updates helping sales recover from 2027 and supporting additional market-share gains. The argument is that NIO’s premium positioning can translate into stronger volume growth without sacrificing margins, provided the company executes on its launch pipeline.

Despite the improved outlook, NIO shares remain down 6% year to date. Goldman said the company still trades at a discount to other pure-play EV makers under its coverage, with projected 2026 and 2027 price-to-sales multiples standing at discounts of 25% and 29%, respectively. Its projected 2027 price-to-earnings ratio is also about 17% below peers.

That valuation gap could narrow if NIO’s product cycle continues to improve and profitability strengthens, according to Goldman. The view is broadly aligned with Wall Street consensus: London Stock Exchange Group (LSEG) data cited in the report show that 20 of the 28 analysts covering NIO currently rate the stock “Buy” or “Strong Buy.”