What in the World Happened to Nio?

Daniel Miller, The Motley Fool

Sat, Apr 5, 2025, 5:45 AM 5 min read

It wasn't that agelong agone that Nio (NYSE: NIO) seemed poised to station a breakout 4th quarter.

The Chinese electrical conveyance (EV) shaper had transportation momentum driven by a caller brand, Onvo, which began boosting deliveries astatine the extremity of 2024. It had a bully 3rd 4th erstwhile it improved conveyance margins amid a challenging environment, and it had launched yet different brand, Firefly, that was positioned to thrust the apical enactment adjacent higher passim 2025.

But past Q4 mostly disappointed Wall Street analysts and main thoroughfare investors alike. So what happened?

One of the largest reasons to bargain into Nio's imaginativeness was that the antecedently mentioned caller brands are acceptable to thrust deliveries higher and frankincense make beardown gross growth. While portion of that worked according to plan, it's besides existent that it didn't thrust top-line maturation analysts expected during the 4th quarter.

In Q4, conveyance deliveries checked successful astatine 72,689. That fig breaks down into 52,760 vehicles from its premium Nio marque and the remaining 19,929 vehicles from its family-oriented astute EV brand, Onvo. The effect was a coagulated 45% summation implicit the anterior year's Q4 and a steadfast 17.5% leap from 2024's Q3.

However, that conveyance transportation maturation didn't thrust the apical enactment rather arsenic investors hoped. Total gross jumped 15.2% from the anterior twelvemonth and accrued 5.5% from 2024's 3rd quarter. This suggests that portion the institution is so expanding its sales, China --Nio's superior marketplace presently -- is inactive successful the heavy of a precise brutal terms warfare that's causing competitors to aggressively slash prices to support marketplace share.

While the apical enactment remained sluggish compared to the company's transportation gains, determination is simply a metallic lining successful the data. The conveyance borderline checked successful astatine 13.1% during Q4 compared to 11.9% during the anterior year's Q4 and the aforesaid level arsenic 2024's 3rd quarter. This suggests that portion the Chinese EV shaper had to get much competitory connected pricing, it was besides capable to trim costs capable to salvage its margins.

So, to summarize, Nio is expanding its income and deliveries done caller marque launches portion simultaneously cutting costs to prevention its margins. Why wasn't Wall Street satisfied?

Nio's banal terms had been connected a dependable emergence done March close up until the institution prepared to driblet its Q4 results connected the market. Nio's apical and bottommost enactment checked successful little than analysts estimated for Q4, but the main driving unit down the pessimism is apt the company's unenthusiastic guidance for 2025's Q1.