Nio Inc (NYSE:NIO) has seen an impressive comeback from the COVID-19 pandemic that has caused months of lockdowns and business shutdowns worldwide. The Chinese Electric Vehicle started reported record results for revenue and deliveries in the Q2 2020.

Strong sales in China driving the company’s comeback

A number of factors drive the company’s results in the wake of a global pandemic. First, China reported a return to strong automotive sales after being among the first counties to announce success. In addition, the company benefited from an investment by local government entities amounting to $1 billion.

 The successful rollout of Nio’s updated version of its first electric SUV saw the company take advantage of a growing market in China. This also contributed to the company’s surprise record results. The record results have placed the electric vehicle maker on its most solid footing since 2018.

Nio is standing up to growing competition

Nio’s record results come at a very crucial moment. While the pandemic may have caused many startups to the brink of being wiped out, a rebound in the Chinese automotive industry has seen heated competition among startups keen to make a comeback.

Currently, Tesla is the largest automaker globally, but there is renewed hope for electric vehicle startups to succeed in China before renowned automakers like Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM), and Volkswagen start shipping their respective EVs.

The Chinese electric vehicle manufacturer recently announced better-than-projected second-quarter results and issued strong projections for the third quarter of 2020. Alexander Potter, an analyst at Piper Sandler, reiterated a Neutral rating on Nio but raised the price target projection from $4 to $14. On the other hand, Ming Hsun Lee, a BofA Securities analyst, reiterated a Buy rating and increased the price target from $17.40 to $18.

The company also reported a narrow loss than earlier, projected thanks to a higher gross margin. The company reported a 9.7% high historical vehicle margin plus other items that performed 5% higher than projected.