📌 WHAT HAPPENED

Chinese EV manufacturer Nio Inc. (NYSE: NIO) reported third-quarter revenue of $1.36 billion, down 46% year-over-year and below analyst expectations. The company delivered 55,432 vehicles during the quarter, a drop from 31,041 in the second quarter but still down from the 31,607 units delivered in Q3 2022. Gross margin improved modestly to 8.0% from 1.0% in Q2, yet it remains far below previous years. Nio posted a net loss of $624 million, although that figure narrowed slightly from the previous quarter’s loss of $835 million.

💡 WHY IT MATTERS

The results underscore mounting pressure in China’s electric vehicle sector, where heavy price competition and slowing consumer demand are squeezing profitability. While Nio is investing heavily in new models and battery-swapping infrastructure, these have yet to materially bolster sales or market share. Continued losses and declining revenue raise concerns about near-term sustainability, particularly in contrast to stronger performances from Tesla and BYD.

📈 INVESTMENT PERSPECTIVE

For investors, Nio’s declining revenue trajectory and persistent losses signal caution. Although the company has introduced new vehicles like the EC6 and aims to expand its international presence, the lacklustre financial performance reflects operational inefficiencies and subdued demand. Gross margin improvement suggests some cost control progress, but it remains insufficient in offsetting weak topline growth. With operating expenses still high and vehicle ASPs under pressure, Nio may remain unprofitable well into 2025. Unless a major turnaround in demand materialises or costs are severely curtailed, further equity dilution or government support may be required. Short-term upside appears limited, with performance tethered to broader sector recovery and internal execution.

🎯 BOTTOM LINE

Nio’s Q3 earnings highlight a company struggling under weighty structural and market headwinds. Without a notable improvement in sales volume or profitability, the stock faces continued downside risk. Investors should be selective and await clearer signs of recovery or stabilisation before re-engaging.