NIO (NIO) Stock: Investor Confidence Tested After Weak Q1 Outlook

TLDR

Table of Contents

NIO reported a wider-than-expected Q4 loss of 7.12 billion yuan ($974 million), up 32.5% from last year
The company delivered 72,689 vehicles in Q4, a 45% increase year-over-year, but slightly below expectations
NIO provided weak Q1 guidance, projecting 41,000-43,000 vehicle deliveries and revenue of $1.69-1.76 billion
NIO stock fell 3.6% in premarket trading, also dragging down other Chinese EV makers
Despite challenges, NIO maintained its position as leader in China’s premium BEV market with 40% market share

NIO shares dropped sharply on Friday after the Chinese electric vehicle manufacturer reported fourth-quarter financial results that missed analyst expectations and issued guidance well below market forecasts.

The company’s American depositary receipts fell 3.6% to $4.54 in premarket trading. The disappointing report also affected other Chinese EV makers, with Li Auto dropping 2.9% and XPeng falling 4.3%.

NIO reported a net loss of 7.12 billion Chinese yuan ($974 million) for the fourth quarter. This represents a 32.5% increase in losses compared to the same period last year.

Revenue came in at 19.7 billion yuan ($2.70 billion). Analysts had expected a loss of $985 million on revenue of $2.79 billion, according to FactSet consensus estimates.

Q4 Delivery Performance

The company delivered 72,689 vehicles during the fourth quarter. This marks a 45% increase from the prior year but still fell short of the 73,207 vehicles analysts had expected.

Vehicle sales reached 17.48 billion yuan, representing a 13% year-over-year increase. This was below analyst expectations of 18.04 billion yuan.

There was some positive news in the report. NIO’s vehicle margin improved to 13.1% from 11.9% a year earlier, nearly matching expectations of 13.2%.

Weak First Quarter Outlook

The company’s guidance for the first quarter of 2025 disappointed investors. NIO expects to deliver between 41,000 and 43,000 vehicles in the current quarter.

Revenue is projected to be between $1.69 billion and $1.76 billion for Q1. The midpoint of this range falls well below the $2.48 billion that analysts were forecasting.

The delivery forecast of 41,000-43,000 vehicles is particularly concerning. It represents a substantial drop from the previous quarter and is far below analyst expectations of 65,052 vehicles.

Market Position Despite Challenges

William Bin Li, founder, chairman, and CEO of NIO, highlighted some achievements despite the challenging results. “In 2024, we achieved a new delivery record of 221,970 vehicles,” he stated.
Li also noted the company’s market position. “Throughout the year, NIO brand maintained its position as the leader in China’s BEV market for vehicles priced over RMB300,000, capturing a 40% market share,” he said.
The CEO pointed to progress with newer models as well. “The market share of the ONVO L60 have been steadily increasing since its launch, securing a top-three position in China’s BEV SUV market priced between RMB200,000 and 300,000,” Li added.

NIO continues to face challenges in the competitive Chinese EV market. The company is struggling to keep up in what industry observers describe as a bruising price war among electric vehicle manufacturers.

The stock’s decline on Friday adds to an already difficult year for NIO shareholders. Investors appear concerned about the company’s path to profitability as losses continue to widen despite delivery growth.

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