Shares of Nio (NIO 2.39%) had a fairly bumpy start to 2025, with shares trading 21% lower through the first six months of the year, according to data from S&P Global Market Intelligence. The Chinese electric vehicle (EV) maker is in a bit of a pickle currently. On one hand it's making cost improvements and launching two new sub-brands, but on the other hand China's EV market is embroiled in a brutal price war that's quickly becoming a race to the bottom.
One of the larger developments during the first six months of the year was Nio's first-quarter earnings, which left many investors wanting more. Nio reported a net loss of about $930 million during the first quarter, which was a substantial 30% increase compared to the prior year. The increase was driven by higher research and development as well as marketing expenses. It's widening losses such as this that concern analysts about the company's ability to reach profitability.
The silver lining
The first-quarter data wasn't all bad, however. Nio also reported vehicle margin increased to 10.2%, compared to the prior year's 9.2% -- impressive considering the crippling price war. Total revenue and gross profit also increased 22% and 89%, respectively, compared to the prior year.
"Since the first quarter, we have implemented a range of cost control measures, including organizational restructuring, cross-brand integration, and efficiency improvements in R&D, supply chain, sales and services," added Stanley Yu Qu, Nio's chief financial officer, in a press release. "Starting from the second quarter, the Company aims to achieve structural improvements in overall cost efficiency, with continued progress in operational performance."
Image source: Nio.
In other news, Nio is beginning to fire on all cylinders when it comes to deliveries.
Data source: Nio monthly sales releases. Chart by author.
While seasonality impacted recent results, you can see that the launch of two Nio sub-brands is already taking its deliveries to another level, and deliveries should only increase as production of the newer Firefly brand accelerates. Nio's stock has been on the decline during the first half of 2025, and that's understandable given the price war in China and the disruptions caused by tariffs altering export plans. The company has a big second half in store for investors, though.
Not only will Nio be attempting to double its deliveries between 2024 and the end of 2025, but management's goal is to break even during the fourth quarter, which would require a substantial improvement on costs and flawless vehicle launches. For context, most analysts don't expect Nio to turn a profit until 2028, so breaking even in the fourth quarter would be a massive step toward convincing Wall Street it can scale its business.
The first six months were a fairly wild ride for Nio investors, but buckle up, because the story is just getting started.
