The closure of the Strait of Hormuz since February 28 drove up crude oil prices, which paradoxically benefited EV stocks. Higher oil prices make electric vehicles more appealing to consumers seeking to escape oil price volatility. Rivian and Nio have emerged as top performers, with Rivian rising 16% since the closure due to its new R2 SUV launch, while Nio gained 4% and remains undervalued. Both companies are well-positioned for long-term growth in the expanding EV market.

The global EV market is projected to reach US$2.74 trillion in 2026, growing at 9.0% annually, driven by regulatory changes, charging infrastructure investment, and battery supply-chain development. Chinese automakers are intensifying international competition, while battery sourcing and regional manufacturing become strategic priorities. Major players are forming strategic alliances to compete on affordable EVs, software capabilities, and charging networks.

The Software Defined Vehicle (SDV) market is projected to experience significant growth at a CAGR of 16.0% from 2026 to 2035, driven by automakers' transition to software-centric architectures, OTA updates, 5G connectivity, and new recurring revenue models. Europe leads the market, with major players investing in centralized computing platforms and AI-enabled vehicle functions.

NIO Inc. delivered 40,597 vehicles in June 2026, a 62.9% increase year-over-year, with cumulative deliveries reaching 1,188,715. The company rolled out an upgraded NIO WorldModel for intelligent driving, achieved 120,000 cumulative deliveries for the All-New ES8, and the ES9 reached 10,000 units sold within 30 days of launch.

The Iran war has driven oil prices higher and accelerated global EV adoption, particularly outside North America. While American oil and gas production reached record levels, non-U.S. EV markets are booming, with China leading at 12.9 million units sold in 2025. Chinese EV makers like BYD have surpassed Tesla in sales, though their stock valuations differ significantly. The global EV market is forecast to reach $12.6 trillion by 2030 with a 26.7% annual growth rate.

China's domestic EV market is experiencing severe headwinds with NEV sales plunging 47% year-to-date due to reduced subsidies, new vehicle taxes, and economic caution. While competitors like BYD and Geely report significant net income declines, Nio has bucked the trend with 62.3% May delivery growth and improved margins. However, investors should watch whether Nio can maintain its guidance for full-year adjusted operating profit in 2026 amid ongoing domestic market pressures.

While EV stocks have fallen out of favor due to concerns about subsidies, tariffs, and competition, the global EV market is expected to grow at 26.7% CAGR through 2033. Rivian and Nio are trading at significant discounts and present buying opportunities as they launch new, more affordable models and improve profitability.

Chinese EV maker Nio reported 37,705 vehicle deliveries in May, up 62.3% year-over-year, driven by new budget and premium models. The company achieved Q1 revenue growth of 122% year-over-year with improved margins of 18.8%, though it returned to net losses of $71.8 million in Q1 after a brief profitable quarter. Nio is launching budget vehicles through its Onvo sub-brand to compete with Tesla and BYD while establishing in-house chip manufacturing, but sustained profitability remains uncertain.

NIO Inc. announced it has been added to the U.S. Department of Defense's 'Chinese military companies' list. The company disputes the inclusion, stating it is not a military company or defense contractor. NIO clarified that the CMC List is not a sanctions list and will not impact its business operations or securities trading. The company plans to engage with the U.S. Department of Defense and pursue legal action if necessary to challenge the designation.

While Chinese automakers like BYD and Geely are rushing to export vehicles overseas to offset declining domestic sales and eroding margins from an EV price war, Nio is thriving by focusing exclusively on the Chinese market. Nio achieved 62.3% year-over-year delivery growth in May, improved vehicle margins to 18.8%, and maintained positive operating profit in Q1, contrasting sharply with competitors' profit declines.

Nio is outperforming competitors in China's brutal EV price war, posting 62% delivery growth in May and 69% year-to-date growth through May 2026. The company has improved vehicle margins to 18.8% in Q1 2026 from 10.2% a year prior, while maintaining strong pricing power and expanding profitability despite industry headwinds that have significantly impacted competitors like BYD and Geely.

Nio achieved profitability in Q1 2026 with 98.3% delivery growth and 19% gross margin, demonstrating operational efficiency that rivals Rivian and Lucid have yet to match. The Chinese EV maker's pricing power remains strong despite domestic price wars, supported by expansion into sub-brands like Onvo and Firefly. However, questions remain about the viability of its battery-swapping network investment.