Nio Inc. (NIO) shares moved higher Tuesday, riding a broader wave of optimism across Chinese EV makers after Beijing delivered some welcome news on the policy front.

China's National Development and Reform Commission confirmed that vehicle trade-in subsidies will continue through 2026, effectively extending a program that's been propping up auto replacement demand. For EV makers like Nio, that's a tangible near-term boost—government backing for consumers looking to swap their old rides for shiny new electric ones.

Firefly Takes Flight in Austria

While policy tailwinds helped the stock, Nio has been busy on the ground in Europe. The company's compact EV brand, Firefly, started deliveries in Austria this week, according to CnEV Post. That marks another step in the brand's European rollout, which previously covered Norway and the Netherlands.

Austria isn't alone. Customers in Belgium, Denmark, and Greece have also started receiving their Firefly vehicles this month, suggesting the company is moving quickly to establish a foothold across the continent.

Nio unveiled Firefly at NIO Day 2024, positioning the hatchback to compete in the small premium EV segment. The model launched in China back in April and hit early delivery milestones without much drama. Delivery momentum has picked up considerably across Europe in the latter half of 2025.

A Chip Shortage Complicates the ES8

Not everything is running smoothly, though. Nio recently flagged a supply shortage affecting a chip used in its ES8 SUV. The issue could slow production and push back some deliveries, though the company says it's deployed a temporary fix to keep things moving.

It's a reminder that even as Nio expands internationally, supply chain hiccups remain a persistent challenge in the EV world.

The Bigger European Picture

Firefly's arrival in Austria fits into Nio's broader global strategy. The company initially focused on Nordic and Benelux markets before moving into Central Europe. The plan calls for additional European countries to come online in 2026, suggesting Nio isn't slowing down its international ambitions anytime soon.

For now, the combination of extended Chinese subsidies and European expansion appears to be giving investors something to feel good about.

NIO Price Action: Nio shares were up 4.87% at $5.60 at the time of publication on Tuesday, according to market data.