Chinese electric automaker NIO (NYSE:NIO) reported yesterday that it delivered 3,155 vehicles in April, more than double its sales in April of last year, as it resumed full production with the coronavirus pandemic receding in China.

The pandemic put a damper on NIO's sales earlier in the year, but its April result shows that it has recovered to pre-outbreak levels. The company also began deliveries of an overhauled version of its big ES8 SUV in April, with longer range and several new features including battery-swap capabilities. 

NIO has recovered from the COVID-19 outbreak

NIO delivered 248 of the new ES8s in April, along with 2,907 examples of its smaller mainstay five-passenger ES6 model.

A bar chart showing NIO's sales by month. Sales were strong at the end of 2019, dropped in the first 3 months of 2020, and recovered in April.

Data source: NIO. Chart shows monthly sales of NIO's ES8 (in blue) and ES6 (in green) since the start of ES8 production in June of 2018. Chart by author.

CEO William Bin Li said that NIO's recovery is on track and its order book is in good shape. 

"These results were mainly contributed by the recovering production and delivery capabilities," Li said. "Meanwhile, we have witnessed strong order growth momentum driven by the increasing recognition of our competitive products, exceptional services, and particularly the battery swapping technologies by our existing and potential users."

CFO Steven Feng said that with its stores reopened, the company has resumed its effort to expand its sales network. As of now, NIO has 105 sales points up and running in China, he said. 

NIO said in April that it has secured nearly $1 billion in new financing from economic-development authorities in China's Anhui province, in exchange for an agreement to move its headquarters and research facilities to Hefei, Anhui's capital. 

A blue NIO ES8, an upscale seven-passenger electric SUV.

NIO revamped its ES8 SUV, giving it longer range to better compete with Tesla. Image source: NIO.

At least one analyst is becoming more bullish on NIO

The news brought an upgrade from Bank of America analyst Ming Hsun Lee. In a note that was published shortly after NIO released its sales results, Lee upgraded NIO's stock to buy, from neutral, boosting his price target to $5 from $3.40. Nio closed May 5 at $3.28.

Lee said that he is turning more positive on NIO's prospects, given higher sales forecasts through 2021, China's new incentives for electric-vehicle purchasers, and less uncertainty with the new financing deal. He thinks NIO's ongoing cost-reduction efforts and increasing sales will drive improved gross margins over the next few quarters. 

But there are still some big questions

It all seems like good news. But as I said when NIO announced the Anhui financing deal in April, there are some reasons for caution. The deal is a complicated one, in which the investors will fund a new company into which NIO will transfer most of its assets in China. NIO (the company that U.S. shareholders have invested in) will own 75.9% of that new company. 

That all seems well and good. But NIO has yet to clarify why it's using this structure for the deal, what will happen to its assets outside of China, and what will happen to the roughly $1 billion in debt that it had as of the end of 2019 -- all very important questions from an American investor's perspective.

Auto investors will have to wait for NIO to file its 20-F form (similar to a U.S. company's annual report) with the Securities and Exchange Commission to find out. (NIO said on April 29 that its 20-F filing will be delayed until the Anhui deal documents are signed.) In the meantime, investors should tread a bit carefully here.