Nio's Stock Plummets 93% from Peak Amid EV Market Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy NIO?
Source: Fool
- Stock Price Plunge: Nio's stock has dropped from a peak of $63 in early 2021 to about $4.50 today, representing a staggering 93% decline, which indicates a waning investor confidence in the EV sector amid rising competition and trade uncertainties, particularly in the U.S. market.
- Sales Growth: Despite macroeconomic pressures, Nio's third-quarter deliveries surged 40.8% year-over-year to 87,071 units, with its Onvo sub-brand delivering 37,656 units, surpassing the flagship brand, showcasing the company's success in the budget-conscious market segment.
- Margin Improvement: Nio's gross margin increased from 10.7% to 13.9% in the third quarter, indicating ongoing improvements in manufacturing processes and economies of scale that could pave the way for future profitability.
- Low Market Valuation: Despite improving fundamentals, Nio's current price-to-sales ratio stands at just 1, significantly lower than U.S. peers like Rivian at 3 and Tesla at 16, reflecting market concerns about its long-term profitability, especially given its current unprofitable status.
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Analyst Views on NIO
Wall Street analysts forecast NIO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NIO is 5.90 USD with a low forecast of 4.00 USD and a high forecast of 7.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
2 Buy
4 Hold
1 Sell
Hold
Current: 4.550
Low
4.00
Averages
5.90
High
7.00
Current: 4.550
Low
4.00
Averages
5.90
High
7.00
About NIO
NIO Inc is a holding company mainly engaged in the design, development, manufacturing and sales of smart electric vehicles. The Company offers premium smart electric vehicles under the NIO brand, family-oriented smart electric vehicles through the ONVO brand, and small smart high-end electric cars with the FIREFLY brand. The Company focuses on building in-house capabilities including battery swapping, assisted and intelligent driving, digital technologies, electric powertrain and battery, vehicle engineering and design, among others, to control the design and development of the vehicle software and hardware architecture and the critical components.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
NIO Expects First-Ever Adjusted Operating Profit in Q4
- Profit Expectations Rise: NIO anticipates an adjusted operating profit of between RMB 700 million and RMB 1.2 billion for Q4, a significant turnaround from an adjusted operating loss of RMB 5.54 billion in the same period last year, indicating a marked improvement in profitability.
- Sales Growth Driver: The expected profitability is primarily driven by steady growth in vehicle sales, an improved product mix that enhances margins, and ongoing cost-cutting initiatives that support the bottom line, showcasing effective operational strategies.
- GAAP Profit Outlook: NIO expects GAAP operating profit to range from RMB 200 million to RMB 700 million for Q4, marking a crucial shift in financial performance that could bolster investor confidence and attract further interest in the stock.
- Positive Market Reaction: Following this announcement, NIO's shares surged 10% in pre-market trading, reflecting market optimism regarding the company's future profitability and potentially drawing more investor attention to its stock.
See More
Nio's Stock Plummets 93% from Peak Amid EV Market Challenges
- Stock Price Plunge: Nio's stock has dropped from a peak of $63 in early 2021 to about $4.50 today, representing a staggering 93% decline, which indicates a waning investor confidence in the EV sector amid rising competition and trade uncertainties, particularly in the U.S. market.
- Sales Growth: Despite macroeconomic pressures, Nio's third-quarter deliveries surged 40.8% year-over-year to 87,071 units, with its Onvo sub-brand delivering 37,656 units, surpassing the flagship brand, showcasing the company's success in the budget-conscious market segment.
- Margin Improvement: Nio's gross margin increased from 10.7% to 13.9% in the third quarter, indicating ongoing improvements in manufacturing processes and economies of scale that could pave the way for future profitability.
- Low Market Valuation: Despite improving fundamentals, Nio's current price-to-sales ratio stands at just 1, significantly lower than U.S. peers like Rivian at 3 and Tesla at 16, reflecting market concerns about its long-term profitability, especially given its current unprofitable status.
See More
Nio Inc. Issues Positive Profit Alert for Q4 2025
- Positive Profit Outlook: Nio anticipates an adjusted profit from operations of approximately 700 million to 1.2 billion Chinese yuan (about $100 million to $172 million) for Q4 2025, a stark contrast to the 5.54 billion yuan loss in Q4 2024, indicating a strong potential for business recovery.
- Significant Delivery Growth: In January, Nio reported a 96.1% year-over-year increase in deliveries, reaching 27,182 vehicles, with the third-generation ES8 SUV accounting for nearly two-thirds of total deliveries, highlighting the company's ongoing growth and market share expansion in the EV sector.
- Ongoing Technology Investment: Nio continues to invest heavily in smart EV technologies, planning to launch an upgraded NIO World model in January 2026 to enhance assisted driving, smart parking, and safety features, further improving user experience and competitive positioning.
- Stock Price Surge: Following the positive profit alert, Nio's stock rose 9.23% to $4.84 in premarket trading on Thursday, reflecting market optimism regarding the company's future profitability.
See More
BYD Reports Nearly Two-Year Low in January Sales
- Sales Decline: BYD reported sales of 83,249 electric vehicles in January, marking the lowest monthly sales in nearly two years, indicating mounting pressures from weak domestic demand and intensified competition, which could impact the company's future market share.
- Policy Impact: Starting January 1, China reinstated a 5% purchase tax on new energy vehicles, ending over a decade of tax exemptions, a policy shift that may lead to decreased consumer purchasing intentions and exacerbate market contraction.
- Intensifying Competition: Amid a fierce price war, other electric vehicle brands such as Xiaomi and Zeekr reported increased sales in January, highlighting the growing competitive pressure on BYD in the lower-end market, which could affect its long-term profitability.
- Export Slowdown: BYD's exports fell to 100,482 vehicles in January from 133,172 in December, reflecting uncertainty in global market demand, which may negatively impact the company's overall performance.
See More
BYD Reports Nearly Two-Year Low in January Sales
- Sales Decline: BYD reported only 83,249 battery electric passenger cars sold in January, marking a significant drop and indicating weak domestic demand while facing fierce competition, which could impact its market share.
- Policy Impact: The reinstatement of a 5% purchase tax on new energy vehicles starting January 1 ends over a decade of exemptions, likely further suppressing consumer purchasing intentions and affecting overall sales.
- Intensifying Competition: Brands like Xiaomi and Nio reported year-on-year delivery increases in January, with Xiaomi exceeding 39,000 deliveries, highlighting intensified market competition that may pressure BYD's sales.
- Export Decline: BYD's exports fell to 100,482 vehicles in January from 133,172 in December, reflecting weakening international demand, which could adversely affect the company's overall performance.
See More
Rivian vs Nio: Analyzing EV Market Competition
- Rivian's New Model Launch: Rivian plans to launch its R2 model in the first half of 2026 at a starting price of $45,000, below the U.S. average new vehicle price, which is expected to significantly expand its market share and directly compete with Tesla's Model Y.
- Strong Financial Position: In 2025, Rivian produced 42,284 vehicles and delivered 42,247, achieving a positive gross profit of $24 million in Q3, with a cash balance of $7.1 billion, providing financial flexibility for the R2 launch.
- Nio's Delivery Growth: Nio delivered 326,028 vehicles in 2025, with January 2026 deliveries jumping 96.1% year-over-year to 27,182 vehicles, and aims for a 40% to 50% increase in 2026 deliveries, enhancing its competitive position in the market.
- Battery Swap Network Advantage: Nio dominates the global battery swapping market with over 2,300 stations, and despite facing intense competition and high R&D costs, its multi-brand strategy and battery-as-a-service revenue model will strengthen its market position.
See More
NIO Expects First-Ever Adjusted Operating Profit in Q4
- Profit Expectations Rise: NIO anticipates an adjusted operating profit of between RMB 700 million and RMB 1.2 billion for Q4, a significant turnaround from an adjusted operating loss of RMB 5.54 billion in the same period last year, indicating a marked improvement in profitability.
- Sales Growth Driver: The expected profitability is primarily driven by steady growth in vehicle sales, an improved product mix that enhances margins, and ongoing cost-cutting initiatives that support the bottom line, showcasing effective operational strategies.
- GAAP Profit Outlook: NIO expects GAAP operating profit to range from RMB 200 million to RMB 700 million for Q4, marking a crucial shift in financial performance that could bolster investor confidence and attract further interest in the stock.
- Positive Market Reaction: Following this announcement, NIO's shares surged 10% in pre-market trading, reflecting market optimism regarding the company's future profitability and potentially drawing more investor attention to its stock.
See More
Nio's Stock Plummets 93% from Peak Amid EV Market Challenges
- Stock Price Plunge: Nio's stock has dropped from a peak of $63 in early 2021 to about $4.50 today, representing a staggering 93% decline, which indicates a waning investor confidence in the EV sector amid rising competition and trade uncertainties, particularly in the U.S. market.
- Sales Growth: Despite macroeconomic pressures, Nio's third-quarter deliveries surged 40.8% year-over-year to 87,071 units, with its Onvo sub-brand delivering 37,656 units, surpassing the flagship brand, showcasing the company's success in the budget-conscious market segment.
- Margin Improvement: Nio's gross margin increased from 10.7% to 13.9% in the third quarter, indicating ongoing improvements in manufacturing processes and economies of scale that could pave the way for future profitability.
- Low Market Valuation: Despite improving fundamentals, Nio's current price-to-sales ratio stands at just 1, significantly lower than U.S. peers like Rivian at 3 and Tesla at 16, reflecting market concerns about its long-term profitability, especially given its current unprofitable status.
See More
Nio Inc. Issues Positive Profit Alert for Q4 2025
- Positive Profit Outlook: Nio anticipates an adjusted profit from operations of approximately 700 million to 1.2 billion Chinese yuan (about $100 million to $172 million) for Q4 2025, a stark contrast to the 5.54 billion yuan loss in Q4 2024, indicating a strong potential for business recovery.
- Significant Delivery Growth: In January, Nio reported a 96.1% year-over-year increase in deliveries, reaching 27,182 vehicles, with the third-generation ES8 SUV accounting for nearly two-thirds of total deliveries, highlighting the company's ongoing growth and market share expansion in the EV sector.
- Ongoing Technology Investment: Nio continues to invest heavily in smart EV technologies, planning to launch an upgraded NIO World model in January 2026 to enhance assisted driving, smart parking, and safety features, further improving user experience and competitive positioning.
- Stock Price Surge: Following the positive profit alert, Nio's stock rose 9.23% to $4.84 in premarket trading on Thursday, reflecting market optimism regarding the company's future profitability.
See More
BYD Reports Nearly Two-Year Low in January Sales
- Sales Decline: BYD reported sales of 83,249 electric vehicles in January, marking the lowest monthly sales in nearly two years, indicating mounting pressures from weak domestic demand and intensified competition, which could impact the company's future market share.
- Policy Impact: Starting January 1, China reinstated a 5% purchase tax on new energy vehicles, ending over a decade of tax exemptions, a policy shift that may lead to decreased consumer purchasing intentions and exacerbate market contraction.
- Intensifying Competition: Amid a fierce price war, other electric vehicle brands such as Xiaomi and Zeekr reported increased sales in January, highlighting the growing competitive pressure on BYD in the lower-end market, which could affect its long-term profitability.
- Export Slowdown: BYD's exports fell to 100,482 vehicles in January from 133,172 in December, reflecting uncertainty in global market demand, which may negatively impact the company's overall performance.
See More
BYD Reports Nearly Two-Year Low in January Sales
- Sales Decline: BYD reported only 83,249 battery electric passenger cars sold in January, marking a significant drop and indicating weak domestic demand while facing fierce competition, which could impact its market share.
- Policy Impact: The reinstatement of a 5% purchase tax on new energy vehicles starting January 1 ends over a decade of exemptions, likely further suppressing consumer purchasing intentions and affecting overall sales.
- Intensifying Competition: Brands like Xiaomi and Nio reported year-on-year delivery increases in January, with Xiaomi exceeding 39,000 deliveries, highlighting intensified market competition that may pressure BYD's sales.
- Export Decline: BYD's exports fell to 100,482 vehicles in January from 133,172 in December, reflecting weakening international demand, which could adversely affect the company's overall performance.
See More
Rivian vs Nio: Analyzing EV Market Competition
- Rivian's New Model Launch: Rivian plans to launch its R2 model in the first half of 2026 at a starting price of $45,000, below the U.S. average new vehicle price, which is expected to significantly expand its market share and directly compete with Tesla's Model Y.
- Strong Financial Position: In 2025, Rivian produced 42,284 vehicles and delivered 42,247, achieving a positive gross profit of $24 million in Q3, with a cash balance of $7.1 billion, providing financial flexibility for the R2 launch.
- Nio's Delivery Growth: Nio delivered 326,028 vehicles in 2025, with January 2026 deliveries jumping 96.1% year-over-year to 27,182 vehicles, and aims for a 40% to 50% increase in 2026 deliveries, enhancing its competitive position in the market.
- Battery Swap Network Advantage: Nio dominates the global battery swapping market with over 2,300 stations, and despite facing intense competition and high R&D costs, its multi-brand strategy and battery-as-a-service revenue model will strengthen its market position.
See More
