Where Will Nio Stock Be in 1 Year?
In This Article:
Key Points
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Shares of the EV maker still trade far below the initial public offering price.
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Investors are concerned about the competitive, macro, and regulatory challenges.
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The stock still looks extremely cheap compared to its industry peers.
Nio (NYSE: NIO), a leading producer of electric vehicles (EVs) in China, posted its first-quarter earnings report on June 3. Its revenue rose 21.5% year over year to 12.03 billion yuan ($1.66 billion), but its net loss widened from 5.18 billion yuan ($720 million) to 6.75 billion yuan ($930 million). It missed analysts' expectations on both its top and bottom lines.
Nio's stock rose slightly after that report, but it's still down about 27% over the past 12 months. Let's see if it will finally stabilize and bounce back over the following year.
Is Nio's business stabilizing?
Nio's core brand sells a wide range of electric sedans and SUVs. It also recently launched two sub-brands over the past year: its Onvo brand for cheaper and family-oriented SUVs and its Firefly brand of compact cars. It differentiates itself from its competitors with batteries which can be quickly swapped out at its swapping stations. It's also expanding in Europe to diversify its business away from China.
The Chinese EV maker delivered its first vehicles in 2018. Its annual deliveries soared 81% in 2019, 113% in 2020, and 109% in 2021. Its annual vehicle margin also improved from negative 9.9% in 2019 to a record high of positive 20.1% in 2021 as it scaled up its business and ramped up its production.
However, Nio's deliveries only rose 34% in 2022 and 31% in 2023, while its vehicle margin shrank to 9.5% in 2023. It mainly attributed its slowdown to tough competition, a persistent pricing war in China's EV market, macro headwinds, and adverse weather conditions.
But in 2024, its deliveries rose 39% to 221,970 vehicles as its vehicle margin expanded to 12.3%. On a quarterly basis, its deliveries grew rapidly again throughout the entire year as its vehicle margins rose sequentially:
| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|---|---|---|---|---|---|
| Deliveries | 30,053 | 57,373 | 61,855 | 72,689 | 42,094 |
| Growth (YOY) | (3.2%) | 143.9% | 11.6% | 45.2% | 40.1% |
| Vehicle Margin | 9.2% | 12.2% | 13.1% | 13.1% | 10.2% |
Data source: Nio. YOY = Year-over-year.
What are Nio's catalysts and challenges?
Nio's growth accelerated again as it delivered more premium ET-series sedans and Onvo SUVs in China, grew its domestic market share, and continued its expansion across Europe. Nio also further differentiated itself from China's other EV makers by developing its own intelligent-driving chips and SkyOS vehicle operating system. Its margins stabilized as it sold a higher mix of higher-end sedans, reduced its production costs, and streamlined its expenses.