Nio Shares Under Pressure as Investors Retreat Following Quarterly Results

Investor confidence in Nio Inc. has been shaken following the release of the company's latest financial figures, sending its stock price downward. The Chinese electric vehicle manufacturer failed to meet revenue expectations despite achieving record vehicle deliveries, while its fourth-quarter outlook fell significantly short of market optimism. This raises critical questions about whether upcoming model launches in 2026 can revitalize the company's growth narrative.

While Nio managed to reduce its net loss to 3.66 billion yuan for the third quarter of 2025—a notable improvement from the 5.1 billion yuan loss recorded during the same period last year—the path to sustained profitability remains challenging. The company reported encouraging margin improvements, with its gross margin climbing to 13.9% and vehicle margin reaching 14.7%. These gains are largely attributed to effective cost reduction measures and the scaling of its newer Onvo brand.

Nevertheless, achieving consistent profitability continues to be a distant goal. Substantial ongoing investments in expanding its battery swap infrastructure, developing the Firefly brand, and advancing autonomous driving technologies continue to pressure the bottom line. Although Nio maintains a solid liquidity position with 36.7 billion yuan in liquid assets, sufficient to fund operations for the coming twelve months, the journey toward the black remains arduous.

Revenue Falls Short Amid Record Deliveries

The company's third-quarter performance revealed a concerning disconnect between delivery numbers and financial performance. Nio reported revenue of 21.79 billion yuan (approximately $3.06 billion), representing solid year-over-year growth of about 17%. However, this figure fell short of Wall Street's expectations of 22.29 billion yuan.

Should investors sell immediately? Or is it worth buying Nio?

This revenue miss becomes particularly striking when contrasted with the company's delivery achievements. Nio delivered 87,071 vehicles during the quarter, marking a substantial 41% increase year-over-year and setting a new record. The failure of revenue to keep pace with this delivery growth indicates declining average selling prices, primarily driven by an evolving product mix that increasingly features more affordable models like the Onvo L90, coupled with intense price competition in China's EV market that continues to compress margins.

Weak Fourth-Quarter Guidance Triggers Analyst Downgrades

The most significant blow to investor sentiment came from management's projection for the current quarter. Nio anticipates deliveries between 120,000 and 125,000 vehicles for the fourth quarter. While this represents considerable growth compared to the previous year, it substantially undercuts more optimistic market forecasts.

The analytical community responded swiftly with several adjustments to their positions:

• Macquarie downgraded the stock from "Outperform" to "Neutral" and dramatically reduced its price target from $6.70 to $5.30. The bank cited the weak volume guidance and potential headwinds from diminishing government subsidies as primary concerns.
• Bank of America maintained its neutral rating but lowered its price objective to $6.70, with analysts expressing uncertainty about sales trajectory clarity heading into early 2026.
• Morgan Stanley emerged as a notable exception, maintaining its "Overweight" rating with a $9.00 price target. The firm pointed to anticipated margin improvements and upcoming model launches next year as reasons for continued optimism.

Technical Support Levels Tested Amid Sustained Selling Pressure

Nio's stock has recently tested critical technical support levels around the $5.30 mark. The combination of disappointing revenue performance and growing analyst skepticism has effectively dismantled any short-term positive momentum. Market participants now await evidence that Nio can achieve the upper range of its fourth-quarter delivery guidance. Additionally, investors are looking toward the 2026 launch of the Firefly brand to potentially reinvigorate growth prospects. Until these catalysts materialize, the equity is likely to remain under significant pressure.