Many financial traders would immediately identify Tesla (NASDAQ:TSLA) as their top new-energy vehicle investment. However, I invite you to consider China-based electric vehicle manufacturer Nio (NYSE:NIO). There’s a compelling setup with NIO stock today as Nio is aggressively churning out its popular line of electric SUVs this year.

You may have heard that some institutional investors are taking share positions in Nio. For example, Abu Dhabi-owned Cyvn Investments reportedly holds a whopping 124,833,157 Nio shares.

Of course, you don’t have to buy 100 million or more shares of NIO stock to express your bullish outlook. After delving into Nio’s details, though, you may be persuaded to take a small but confident stake in this next-generation EV maker.

Nio Gets Busy With SUV Production Pace

I will not pretend that all the news associated with Nio is positive. Unfortunately, Nio will have to face a class-action lawsuit in the U.S. over the automaker’s factory-building claims.

Investors should definitely keep tabs on that story for further developments. There are reasons to be optimistic about Nio’s prospects as a business venture. As you may have heard, the company delivered more than 10,000 of its ES6 SUV units in July.

Nio is preparing for a ramp-up in vehicle sales in the coming months. Or at least that’s what I’m assuming, as it would explain why is Nio reportedly producing 300 or more ES6 units per day.

I’ve even heard that, after a pause, Nio’s production-plant workers were taking double shifts. This is what you might expect to see in a company that’s preparing for a ramp-up in sales. At the very least, it’s a positive sign for Nio in 2023’s second half.

Smartphone Could Be the Next NIO Stock Catalyst

Sometimes, it can be a good thing for a company to diversify its business model. In Nio’s case, investors should be intrigued when they discover that the automaker is venturing into the smartphone market.

Believe it or not, Nio is expected to deliver its first smartphone, called the NIO Phone, during the current quarter. Electrek.co reports that the NIO Phone is “powered by Android with 5G support and dual-SIM card capacity.”

Of course, there are no guarantees that the NIO Phone will be a blockbuster success. Perhaps it could be a bestseller in China, though, where the Nio brand is well-known.

This isn’t an instance of Nio just doing something on a whim. The NIO Phone has been in development for a while. It will certainly be interesting to find out whether Nio’s new smartphone can provide a significant revenue stream for the company.

NIO Stock: Keep Your Eyes on the Road Ahead

Nio is staying active with rapid vehicle production and a new smartphone. Some investors might worry about competition from Tesla and other rivals, but it looks like Nio is moving ahead at full speed.

Nio will have to face challenges and there’s no need to over-invest in the shares. I expect NIO stock to eventually reach $15 and even $20 at some point, though.

So, I encourage risk-tolerant traders to consider investing in Nio. Just maintain a small position size and be prepared to stay for the long haul.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.