NIO in Focus: Turbulent Year with Highlights and Challenges

The shares of the electric car manufacturer NIO have lost nearly half of their value over the past year, and volatility remains high. Despite ongoing losses and an uncertain path to profitability, the company is showing impressive progress in some areas. The automotive industry is becoming increasingly competitive, and savvy investors seem to have already shifted their focus to automation technologies. The future of battery swapping technology also continues to cause headaches. Despite my skeptical stance towards NIO, it is worth acknowledging the positive developments. NIO's delivery figures for the fourth quarter of 2024 show record results, dispelling concerns over the average selling price and margin increase of the sub-brand. A total of 72,689 vehicles were delivered in the fourth quarter, including a monthly high of 31,138 units in December. Particularly encouraging is the recovery of deliveries from NIO's core brand, which reached 20,610 units in December. This stabilization could lead to improved selling prices and revenue growth. Additional upward momentum could arise from the introduction of the premium sedan ET9, which will be delivered from March 2025 at a price of 788,000 RMB (approximately 108,000 USD). The limited "First Edition" at 818,000 RMB was already sold out with 999 units sold, indicating strong demand for NIO's high-end models – some already compare the car to the S-Class from China. Meanwhile, ONVO, a sub-brand of NIO, recorded significant growth with 10,528 L60 models delivered in December, representing a monthly increase of 107%. This rapid upward movement suggests that previous bottlenecks in battery supply have largely been overcome, enabling NIO to efficiently meet demand and swiftly handle pre-orders. Against this backdrop, the year 2025 could indeed represent a turning point for the company. Despite these positive signals, there are several reasons for pessimism, especially in light of increasing competition. The premium segment that NIO has traditionally focused on is being increasingly enlivened by the entry of traditional automobile manufacturers. The more affordable market segment is even more intensely competitive, particularly due to companies like BYD and Tesla aggressively lowering prices to increase their market share.