NIO: Maintain BUY and Increase Price Target to $8

Capital_Insights
2025-09-04

$NIO Inc.(NIO)$ (NIO, BUY) - Inflection in Sight as New Models Drive Demand and Margins; Maintain BUY and Increase PT to $8 — Tiger Research

We are maintaining our BUY rating and increasing PT to $8 (was $5) after NIO reported 2Q results with solid 2H outlook.

2Q results. NIO reported 2Q25 deliveries of 72,056 units (+26% YoY, +71% QoQ), broadly in line with the pre-announcement and market expectations. Revenues rose to RMB 19.0bn (+9% YoY, +58% QoQ). Gross margin improved sequentially to 10.0% (vs. 7.6% in 1Q), while vehicle margin was stable at 10.3%. Gross margin on other sales was 8.2% in 2Q, turning meaningfully positive compared to prior periods. Non-GAAP operating loss narrowed >30% QoQ, reflecting early benefits from cost control initiatives. Overall, 2Q25 results were largely in line with expectations, as investors had already focused on delivery data. The print confirms stabilization in operations, but attention is firmly on the growth and margin outlook for 2H25.

3Q guidance and 2H outlook. Management guided 3Q25 deliveries of 87–91k units (+41–47% YoY), a new quarterly record. Revenue is expected at RMB 21.8–22.9bn (+17–23% YoY). Looking further ahead, management targets 4Q25 deliveries of ~150k units (~50k/month) across NIO, ONVO, and FIREFLY brands. Importantly, vehicle margin is expected to climb to 16–17% in 4Q25, supporting a non-GAAP breakeven at the group level, with the ONVO L90 and ES8 achieving ~20% margin individually. This sequential improvement in both volume and profitability suggests NIO is entering a structural inflection point after multiple quarters of restructuring and efficiency gains.

The market reception of ONVO L90 (launched July) and All-New ES8 (deliveries start late September) has been notably strong. The L90’s first full delivery month (August) reached 10,575 units, exceeding internal expectations. Pre-orders and early feedback on the ES8 are also robust, with management confident in its competitiveness in the premium three-row SUV segment.

In our view, these two products are critical proof points: they show NIO can regain consumer mindshare with competitive design, technology upgrades (900V high-voltage platform, proprietary smart-driving chip), and attractive pricing without compromising profitability. This bolsters confidence in the company’s ability to sustain growth and expand margins through the next product cycle.

Beyond 2025, the product roadmap looks robust. Management confirmed 2026 will bring at least three new large SUVs: ONVO L80, NIO ES9, and NIO ES7, while FIREFLY and existing models (ET5, ET5T, ES6, EC6) will continue with minor special editions. If the L90 and ES8 momentum is any indication, the 2026 models could provide significant upside in volumes and further margin expansion, especially as NIO’s in-house technology and battery swap ecosystem continue to scale.

Our thoughts. While near-term profitability remains a work in progress, NIO’s H2 outlook is clearly improving with volume acceleration and margin expansion on the back of the ONVO L90 and ES8. The real upside, however, lies beyond 2025: if the upcoming 2026 models — including ONVO L80, ES9, and ES7 — can replicate the strong reception of the L90 and ES8, NIO could not only sustain its recovery but also materially expand scale and margins. Execution on these launches will be critical in determining whether NIO can transition from a turnaround story into a growth compounder.

Estimate revisions. Increasing 3Q delivery estimate by 3%, but decreasing revenue by 6%, and increasing non-GAAP operating loss by RMB 668M. However, increasing 4Q revenue estimate by 67%, and increasing non-GAAP operating income by RMB 2,559M. Increasing ’25 revenue estimate by 17%, and decreasing non-GAAP operating loss estimate by RMB 1,070M.

If you are interested in Chinese Assets, Welcome to read more on @Tiger_Academy

Feel free to open Cash Boost Account to gain more buying power.

🧘 Open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs.

# 💰Stocks to watch today?(19 Jan）

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment（3）

  • Top
  • Latest
  • Ninja888
    ·2025-09-04
    TOP
    You forgot to report that losses wiped out Nio's shareholders funds. Whats is Nio's debt/equity now?
    Reply
    Report
  • Astrid Stephen
    ·2025-09-04
    Great 2H outlook! NIO's inflection is really coming!
    Reply
    Report
  • Athena Spenser
    ·2025-09-04
    Wow! NIO's 8 target! New models will drive it up!
    Reply
    Report