Investors have been patiently waiting for Nio (NIO -4.21%) to post explosive delivery growth for years now. The Chinese electric-vehicle (EV) maker has reported strong numbers, including eight consecutive months of deliveries topping 20,000 units, but the figures remained stagnant through much of 2024.
The good news is that if December is any indication, 2025 could finally bring the delivery that growth investors have waited to see. But will it be enough to send Nio's stock, which shed over half its value in 2024, higher once again?
By the numbers
Strong delivery figures in December capped off a strong year for the company. Deliveries reached 31,138 vehicles in December, a new monthly high for the company, representing a staggering 73% jump year over year. The bulk of those deliveries (20,610 vehicles) were from the company's namesake Nio brand, but another 10,528 vehicle deliveries were generated by its newer EV brand, Onvo.
December capped off a strong quarter as well, with Nio delivering 72,689 vehicles during the fourth quarter -- a new quarterly record. That result was good for a significant 45% increase compared to the prior year. If a picture is worth a thousand words, the chart below should speak volumes.
Data source: Nio press releases. Chart by author.
Even better for investors, Onvo is just getting started. Deliveries in December jumped 107% from November, and deliveries of its first model, the L60 SUV, only started on Sept. 28. Further, Onvo will launch two SUVs next year, and Nio expects the brand to reach 20,000 vehicles delivered monthly and over 200,000 units total for 2025.
December brought even more for investors to digest with the company's annual Nio Day taking place on Dec. 21. That's when the company launched the Nio brand ET9 as well as an entirely new Firefly brand. While Nio's management only expects its namesake brand to grow moderately in 2025, the two newer brands are expected to drive significant growth. In fact, Nio's sales target for 2025 is double that of 2024, or roughly 440,000 vehicles.
That level of delivery growth will certainly drive revenue higher, but will it be enough to drive the stock price?
Caution
Unfortunately, Nio's primary homeland market, China, is in the middle of a vicious EV price war. It's been vicious enough to send import brands scrambling with sales spiraling, and it has clobbered some domestic auto financial results.
The bad news is that China's EV price war could get worse before it gets better. "The market will definitely see fiercer competition in 2025," said XPeng Motors CEO He Xiaopeng, in a letter to staff obtained by CnEVPost. "And I can even make a bold prediction that price war will ignite from January."
Nio's stock could certainly trade higher with booming delivery and revenue figures, but investors might require more before jumping on board. Investors might need to see the impact of the price war during the first half of 2025, and whether or not Nio can offset some of the margin pressure from a race to the bottom of vehicle price tags.
While there will almost certainly be some financial pain and margin pressure for Nio going forward, the company was able to offset that pressure during the third quarter. In fact, while vehicle sales revenue declined 4% year over year, Nio's vehicle margin actually climbed over the same time frame from 11% up to 13%. If that type of result is replicable going forward -- a very big "if" -- it would almost certainly drive Nio's stock price higher once again.
Investors would be wise to temper expectations for Nio's stock price during 2025 if the price war continues to heat up. However, the company seems poised to finally deliver the explosive delivery growth investors have patiently waited on -- better late than never.
