Nio (NIO +2.74%), a major producer of electric vehicles (EVs) in China, still trades below its 2018 IPO price of $6.26 per ADR. Yet from 2018 to 2024, its net sales more than quadrupled -- and it still trades at less than one times its projected 2025 sales.
Nio trades at that discount valuation because it faces near-term competitive and macro headwinds. The trade tensions between the U.S. and China are exacerbating that pressure. However, I believe Nio could still easily deliver a tenfold gain within the next few years.
Image source: Nio.
Why is Nio's stock still below its IPO price?
Nio's eponymous brand sells higher-end electric sedans and SUVs. Its newer Onvo and Firefly sub-brands, which both arrived in 2024, sell cheaper SUVs and compact cars, respectively.
Nio differentiates itself with swappable batteries, which can be quickly replaced at its own battery-swapping stations as a faster alternative to traditional charging. It now operates more than 3,500 battery-swapping stations across China and Europe, compared to just 777 at the end of 2021. Its EVs also work with conventional AC/DC chargers.
Nio's deliveries more than doubled in 2020 and 2021, but cooled to 34% growth in 2022 and 31% growth in 2023. That slowdown -- which it attributed to tough macro and competitive challenges -- reduced its vehicle margin from a record high of 20.1% in 2021 to 9.5% in 2023. Its net losses continued to widen, and the bears claimed its business model was unsustainable.
NYSE: NIO
Key Data Points
Why could Nio's stock recover over the long term?
Even as it faced those challenges, Nio's deliveries rose 39% in 2024, fueled by its stronger sales of high-end ET-series sedans and Onvo SUVs in China, as well as its expansion across Europe. Its vehicle margin also expanded to 12.3% as its growing market share boosted its pricing power.
In the first nine months of 2025, Nio's deliveries grew by another 35%. Its vehicle margins expanded sequentially in the second and third quarters, and it expects to report its first adjusted profit in the fourth quarter when it posts its full-year earnings report on March 10.
From 2024 to 2027, analysts expect Nio's revenue to more than double, with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive in the final year. If that happens, and Nio is valued at a more generous 5x forward sales, its stock could rise more than 8x by the beginning of 2027. Therefore, Nio could easily be a ten-bagger stock if the macro environment stabilizes and more investors rotate toward Chinese stocks.
