What’s New With Nio Stock?

Chinese luxury electric vehicle maker Nio stock (NYSE:NIO) reported deliveries of 13,863 vehicles in February. While this represents a 62% increase from the year-ago period, it marks a roughly 5% drop compared to January.  In comparison, Li Auto (NASDAQ:LI), the largest of the emerging EV players in China, delivered 26,263 vehicles for February, an increase of almost 30% year-over-year, while Xpeng (NYSE:XPEV) sold 30,453 vehicles in February, up over 6.5x from 4,545 in the same month last year.  The first couple of months of the year are typically quite sluggish for the Chinese automotive market on account of the Chinese New Year festival, which occurs sometime between late January and mid-February. Considering this, a better way to do year-over-year comps is to add January and February deliveries and compare them with the year-ago period. In this case, Nio sold a total of 27,055 vehicles for January and February combined, up about 49% from 18,187 units in the year-ago period.

Nio’s flagship brand delivered 9,143 vehicles in February, up 12.4% from 8,132 units in the same month last year and up 15% percent month-over-month. The Onvo subbrand, which was launched toward the second half of last year, accounted for much of the year-over-year growth.  However, deliveries declined compared to January to 4,049 vehicles. Nio’s strategy with Onvo has been centered around addressing larger segments of the market and catering to more niche needs. The brand’s first vehicle, the Onvo L60 – seen as a Tesla Model Y rival –  is priced between RMB 200,000 ($28,000) and RMB 300,000 ($42,000). The slowdown in Onvo sales is noteworthy, as supply is unlikely to be a constraint for the L60, with Nio indicating late last year that it planned to double production from 10,000 units in December to 20,000 by March 2025.  That said, things could pick up in the coming months. Onvo’s new L90, a large SUV with three rows of seating, is likely to be unveiled in Q2 and go on sale sometime in Q3 2025. Late last year, Nio also introduced another brand, Firefly, which will compete in the high-end compact car market, taking on the likes of BMW’s Mini and the Mercedes Smart series of vehicles in China. The company said that pre-sales for the new Firefly vehicle were open, with prices starting at 148,800 yuan (roughly $20,500).  While luxury compact EVs remain a niche in China, there is a big market for small EVs, especially in cities and more congested areas. This could allow Nio to expand as the market matures. Moreover, Firefly could also help Nio better compete in Europe, where compact cars dominate the automotive market.

While NIO stock has seen lackluster growth over recent years, the Trefis High Quality Portfolio, with a collection of 30 stocks, has provided better returns with less risk versus the benchmark S&P 500 index over the last four-year period; it’s been less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment around rate cuts and multiple wars, could NIO face a similar situation as it did the last few years and underperform the S&P over the next 12 months – or will it see a recovery?

Nio’s valuation is pretty attractive. The stock trades at about $4.50 per share, or roughly 0.7x consensus 2025 revenues, which is low considering that revenues are projected to grow by over 40% in 2025 per consensus estimates. In comparison, Tesla trades at about 9x revenues, even though revenues are likely to grow by just about 15% per consensus estimates.  See our analysis of Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? for a detailed look at how Nio stock compares with its rivals Li and Xpeng.

[1] Returns as of 3/3/2025
[2] Cumulative total returns since the end of 2016

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