What happened

Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) opened sharply lower on Wednesday, only to recover to positive territory a day after a strong sales report.

NIO's American depositary shares had been down as much as 15% early in the session, but as of 1:45 p.m. EST today, they were trading up about 4.3% from Tuesday's closing price.

So what

NIO was one of several electric-vehicle (EV) stocks that appeared to be headed for another deep-red day early on Wednesday after closing down sharply on Tuesday. Two developments on Monday -- a disappointing partnership deal for electric big-rig start-up Nikola (NASDAQ:NKLA) and a brutal report on Kandi Technologies (NASDAQ:KNDI) from a noted short-seller -- had left auto investors feeling skittish about small companies with big valuations in the EV space.

NIO certainly fits that description. But while it is still small by automaker standards, it's hardly a start-up. NIO is a real company with real products, money in the bank, and real sales. As we learned on Tuesday, those sales are still growing quickly, and I think that's why the stock recovered (and then some) from those early lows.

A red NIO ES6, an upscale electric two-row SUV.

NIO's three-model family of upscale electric SUVs will be joined by two new sedans in 2021, the company said last month. Image source: NIO.

NIO said on Tuesday morning that it delivered 5,291 vehicles to customers in November, more than double its year-ago total, on strong demand for all three of its upscale electric SUV models. Demand is so strong, the company said, that it's pulling forward a plan to boost its monthly production output to 7,500 vehicles, hoping to hit that pace by the end of December. 

Now what

As I mentioned yesterday, NIO's recent string of monthly sales records has won over at least one Wall Street skeptic. In a note on Tuesday, Goldman Sachs analyst Fei Fang upgraded NIO to neutral from sell, and raised the bank's price target on the stock to $59 from just $7.70. 

Fang admitted to underestimating the growth potential unlocked by NIO's batteries-as-a-service program (which lowers up-front costs for buyers), its efforts to increase the range of its existing models, and the positive effect from China's revamped incentive program for EV buyers. 

I agree with all of that, and I'll add one more thing: NIO's strong November deliveries total, along with its accelerated effort to boost production, should put it on track to meet its aggressive guidance for the fourth quarter. NIO said last month that it expects to deliver between 16,500 and 17,000 vehicles in the quarter; through the end of November, it had delivered 10,346.

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