TLDR
- Nio reports Q1 2025 earnings on June 3, with analysts expecting a loss of $0.35 per share and revenue of $1.74 billion
- Company delivered 42,094 vehicles in Q1, a 40% year-over-year increase, with strong performance from new Onvo and Firefly brands
- Management targets breakeven by Q4 2025 through nine new model launches and doubling gross margins to 20% for NIO brand
- Q1 net loss increased 24% to $977 million despite delivery growth, raising questions about ambitious profitability timeline
- Wall Street maintains Hold rating with average price target of $5.07, implying 43% upside potential
Chinese electric vehicle maker Nio faces a critical moment as it prepares to release first-quarter earnings on June 3. The company’s aggressive promise to reach breakeven by the fourth quarter of 2025 will be put to the test against a backdrop of mounting losses and margin pressures.
Wall Street expects Nio to report a loss of $0.35 per share for Q1, slightly worse than the $0.33 loss from the same period last year. Revenue is projected to grow 26% year-over-year to $1.74 billion. The company has a rocky earnings track record, missing analyst estimates in six of the last nine quarters.
Nio’s delivery numbers tell a more positive story. The company delivered 42,094 vehicles in Q1, marking a 40% increase from the previous year. May deliveries reached 23,231 units, up 13.1% year-over-year. Year-to-date deliveries totaled 89,225 vehicles, a 34.7% increase from 2024.
The New NIO ES6 is here!$NIO pic.twitter.com/ChPFfo4ccz
— NIO Admirer (@NIOAdmirer) May 11, 2025
The company’s new brands are showing early promise. Between March 19 and 27, Nio delivered 6,530 vehicles, with 2,690 coming from the new Onvo and Firefly brands. This happened before the company officially ramped up production of these models.
Management has doubled down on its ambitious targets. CEO William Li expects the company to achieve breakeven in Q4 2025 based on three key factors: launching nine new models, rolling out new vehicle technologies to boost margins, and expanding the battery swapping network across China’s 27 provinces.
Margin Pressure Threatens Breakeven Dreams
The path to profitability faces steep challenges. Nio reported a Q1 net loss of $977 million, a 24% increase year-over-year. This pushes the projected full-year loss to between $3.1 billion and $3.2 billion, about 4% higher than 2023.
Gross margins came in at 11.7% in Q1. Management has warned that vehicle margins will face pressure due to seasonal factors and product transitions. The NIO brand’s vehicle margins are under stress, while ONVO has been hurt by weaker sales and higher costs.
To reach breakeven, Nio needs to achieve 20% vehicle margins for the NIO brand and 15% for ONVO by Q4 2025. The company plans to get there through cost-cutting measures like standardizing platforms across models and reducing hardware costs.
Management says it already achieved a 10% drop in bill of materials costs in 2024, a trend expected to continue in 2025. The company is also counting on higher-margin models launching in the second half of the year.
Cash Flow Questions Raise Red Flags
Nio’s cash flow reporting has raised some eyebrows. The company reported positive free cash flow in Q3 despite negative operating margins. This likely came from working capital changes rather than operational improvements.
Free cash flow can appear positive through accounting moves like boosting payables or booking early revenue through pre-sales. While not uncommon, this makes it harder to assess the company’s true financial health.
Most analysts expect Nio to continue reporting annual losses until 2027, with the first potential positive earnings in 2028. This timeline clashes with management’s breakeven promise for 2025.
Morgan Stanley analyst Tim Hsiao maintained a Buy rating with a $5.90 price target ahead of earnings. He believes the recent rollout of facelifted ET5 and ET5 Touring models, plus updated ES6 and EC6 SUVs, could strengthen Nio’s competitive position.
Options traders expect a 9.89% move in either direction following the earnings report. This reflects the uncertainty around whether Nio can deliver on its ambitious targets.
Wall Street remains cautious on the stock. Among ten analysts covering Nio, seven recommend holding, two suggest buying, and one advises selling. The average price target of $5.07 implies 43% upside from current levels.
Nio delivered a record 72,689 vehicles in the most recent quarter, marking a 45.2% year-over-year increase driven by strong performance across all brands. Cumulative deliveries reached 760,789 units as of May 31, 2025.
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