Latest news with #Nio
Business Insider
15 hours ago
- Business
- Business Insider
Most Anticipated Earnings this Week – Week of June 2, 2025
The week ahead holds earnings releases for several market-moving companies, including names such as Nio and Broadcom, which are of particular interest to many investors. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Here is a list of this week's most anticipated earnings. Click on any ticker to further research the stock and determine whether it's a Buy, ahead of its earnings report.
Yahoo
2 days ago
- Business
- Yahoo
What NIO's Q1 Earnings Could Reveal About Its Breakeven Dream
Nio Inc. (NIO) has been a disappointing stock this year, underperforming the broader market and particularly its Chinese peers, despite a moderate rebound following the tariff war shock that hit the EV sector. While the company has made progress on deliveries and shown some improvement in margins, the bold target set by management to stabilize losses in Fiscal 2025 still feels out of reach, even with three quarters left. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The upcoming launch of several new models with better margins, along with ongoing cost-cutting strategies, is the main hope for doubling margins by year-end. With Q1 results set to drop on June 3rd, I think investors will be watching closely for any shifts in margin trends or cost structure. That said, I remain skeptical that Nio can consistently maintain steady losses, move toward profitability, and generate healthy cash flow in such a short timeframe. For now, I'd rate the stock as a Hold. Investors are closely monitoring Nio's investment thesis, which hinges on the company achieving financial breakeven by 2025 and potentially turning profitable by 2026. According to Nio's CEO and founder, William Li, the company is expected to hit breakeven in the fourth quarter of this fiscal year based on three key factors: (1) the launch of nine new models to fully diversify the product portfolio; (2) the rollout of new vehicle technologies aimed at gradually boosting gross margins; and (3) perhaps the most challenging, the aggressive expansion of its battery swapping network, with plans to install stations in every county across China's 27 provinces—an initiative that's expected to drive sales. In Q1, Nio reported a solid 42,094 vehicle deliveries, marking a 40% year-over-year increase. The company is also seeing early momentum with its new Onvo and Firefly brands. Between March 19 and 27, out of 6,530 vehicles delivered, 2,690 came from these two brands, even though Nio had not officially started ramping up production of these new models yet. These brands are expected to play a significant role in helping Nio reach its ambitious profitability goals. Management has also reaffirmed its target to double deliveries in 2025 compared to the 2024 goal of 222,000 units. Still, Q1 financials raise some serious questions about how realistic the breakeven by year-end really is. Nio reported a net loss of $977 million, a 24% increase year-over-year, pushing its total projected loss for fiscal 2024 to between $3.1 billion and $3.2 billion—about 4% more than in 2023. Gross margins came in at 11.7%. That helps explain why Nio's ADR has been underperforming. Most analysts covering the stock expect the company to keep reporting annual losses per share until 2027, with the first potential for a positive figure coming in 2028. As for Q1, estimates suggest Nio will report a loss per share of 35 cents, which, while still a loss, would actually be a 7% improvement over the same period last year. Given that analyst consensus seems to clash with Nio management's promise to reach breakeven within the next three quarters, gross margins are likely to be the sore spot come earnings day. Management has already warned in advance that vehicle margins will be under pressure in Q1 due to seasonal factors and a product transition period. They also noted that the NIO brand's vehicle margins are currently under stress, while the ONVO brand has been impacted by weaker-than-expected sales and higher amortization costs. Despite these headwinds, the company aims to improve margins throughout the year, with targets of a 20% vehicle margin for the NIO brand and 15% for ONVO by Q4 2025. In theory, those margin levels are what's needed to hit breakeven. To achieve this, Nio is implementing several cost-cutting measures, such as standardizing platforms across different models and brands (for example, utilizing common seat structures) and reducing hardware costs by consolidating smart vehicle interfaces. Therefore, it'll be essential to monitor the evolution of the cost of sales. Last quarter, it was already up 9.9% year-over-year and 4.4% sequentially. However, management is primarily relying on the launch of higher-margin models in the second half of the year. They're also tightening up pricing and cost controls, which have already led to a 10% drop in the bill of materials in 2024—a trend they say will continue into 2025. Still, it feels like Nio doesn't fully have its business under control. There are just too many internal and external moving parts for the company to realistically double gross margins in such a short time frame. One thing that stood out to me in Nio's story (maybe not in a good way) is how vague the company is when it comes to detailing its cash flows. For a business that annually burns through cash on R&D, infrastructure like battery swaps, and relies on government subsidies, it's a bit surprising how little clarity they provide. A good example is from Q3, when Nio reported positive free cash flow (FCF), despite still posting negative operating margins. In that case, the most likely explanation was changes in working capital, rather than any real improvement in profitability. FCF can still be positive if depreciation is high (a non-cash expense) or if the company boosts payables or books early revenue through pre-sales. In Nio's case, all signs point to this kind of financial maneuvering. And while it's not inherently bad since plenty of companies do it to ease short-term pressure, it's also not a reliable sign of financial health. If FCF is being propped up by accounting maneuvers rather than genuine operational improvements, it's something investors should be wary of. So while Nio's FCF might not look bad at first glance, especially with profitability still lagging, it's likely more of a temporary boost than a true turnaround. The real challenge, which is building a profitable core business, still lies ahead. Analyst sentiment around Nio remains cautious. Among the ten analysts covering the stock, seven recommend holding, two suggest buying, and just one advises selling. Despite this generally conservative outlook, NIO carries an average stock price target of $5.07, implying a significant upside of approximately 38% from the current share price. Investing in Nio remains highly speculative. Currently, management appears to be chasing ambitious targets that may be overly optimistic given the timeframes they've outlined. While Nio is undeniably improving—the delivery ramp-up is a positive sign, and efforts to boost margins are promising—expecting gross margins to double within a year feels unrealistic. Such progress depends not only on internal execution but also on external factors in the EV market, which is grappling with fierce competition, supply chain disruptions, and evolving regulatory challenges. Disclaimer & DisclosureReport an Issue
Motor Trend
3 days ago
- Automotive
- Motor Trend
The Era of Cars Running a Single Computer and Operating System Is Here
Is China really 'there' already, producing cars with centralized computers and a hypervisor? Coming out of CES 2025 earlier this year, we covered a Snapdragon innovation Qualcomm was pitching to automakers, capable of running an entire car on a single chip. Now we just returned from China where we drove a similar system by Chinese EV maker Nio—which designed, developed, and manufactured its own chip in-house, along with the software that runs on it. 0:00 / 0:00 See All 5 Photos Chinese Smart-EV startup Nio's Shenji NX9031 Chip--the world's first Automotive 5nm chip. How are these newish Chinese car companies (Xpeng has designed its own chip, too) able to pull this off? By prioritizing digital development. Nio's engineering workforce of between 10 and 11,000 engineers is split about 70/30 between software versus other branches of engineering, so they do their own electrical architecture, for example, while leaving some hardware-based tasks such as suspension design and development to third parties. Tesla's engineering mix is similar in scope to Nio's, but most legacy automakers reverse those percentages. See All 5 Photos Nio SkyOS Operating System Schematic SkyOS The name may conjure frightening references to SkyNet from the Terminator movies, but this comprehensive vehicular operating system is designed to oversee all systems onboard Nio's entire range of cars—from its simple, compact Firefly EV to the all-singing, all-active-suspension-dancing Nio ET9. We asked whether there was a measurable difference in the number of lines of code or the computing power between a Firefly application and ET9 and were told that no, one SkyOS system fits all. There will simply be fewer features on some models, all connected via an ethernet backbone. A huge benefit touted for SkyOS is its extremely low latency (response time), which is said to be far less than a millisecond. That's considerably quicker than competing Linux systems, and drivers can appreciate such an improvement in latency through touchscreen responses and shorter ABS stopping distances. See All 5 Photos Nvidia's Orin chip has been one of the auto industry's top-performing chips. Nvidia Orin or Shenji NX9031? SkyOS is designed to run on various chipsets, so cars demanding fewer features can utilize less expensive existing chips, while full-featured cars like the ET9 get Nio's new Shenji NX9031—hailed as the automotive world's first production 5nm chip. (Note: 5nm is simply a chip-marketing term that refers to the next step in the evolution of transistor density—the gates are not physically 5 nm apart, but the chip houses more than 50 billion transistors.) Billed primarily as an autonomous driving enabler, the chip reportedly possesses at least double the processing power of two Nvidia Orin chips with a pixel processing capacity of 6.5GB/s and a response time of less than 5 ms, yet it draws considerably less power than an equivalent Nvidia array. Such processing power improves things like the vision systems' ability to recognize objects in low light and for AI personal assistants like Nio's NOMI to process large-language models. See All 5 Photos Schematic comparing and contrasting domain-based versus zonal electrical architecture. Isn't Rivian Basically Right There Too? Close. Rivian's electrical architecture is in the vanguard of American manufacturers, but its system still largely qualifies as zonal, in which various zones aggregate signals from nearby sensors and send them (via simpler communications) to the central computer. Rivian runs an OS from QNX Blackberry. Nio employs zones, as well, but generally fewer of them. Low-feature-set cars like the Firefly might employ one or two zones while a fancy ET9 needs four. What About Tesla? The other vanguard player in America's SDV universe is Tesla, which still employs considerably more than a handful of zones in its more centralized zonal architecture. It also runs open-source software (OSS) such as Linux, GNU toolchain, and other community-based projects such as Ubuntu. SkyOS is Also Open Source Perhaps a future Tesla may leverage Nio's SkyOS, which the company has announced it has made 'open source.' What does that mean? Mostly the software development community is free to look under the hood and develop products and apps to run on the SkyOS system. This is the main motivation for Nio making the software opens source: to improve the user experience with more potential over-the-air updatable features and Easter eggs developed out-of-house. (For reference, Android is open source, while Apple's iOS is not.) Might Americans Ever Experience SkyOS? Barring outright bans on Chinese software, there's every possibility that, say, a domestic or European automaker could leverage Nio's open-source software. Perhaps that possibility is highest with McLaren, which has a technology sharing agreement with Nio. It would certainly seem wise to leverage the development expense of those NX9031 chips by selling them to other automakers, but a lot of strategic calculus goes into making any such decision.
Motor Trend
6 days ago
- Automotive
- Motor Trend
Could Nio's Safety-Certified Yoke Steer-By-Wire be Safer Than Tesla's?
We love the Tesla Cybertruck's steer-by-wire system's functionality so much we awarded it a Best Tech award for 2025. We like how it works and love the way Tesla continually challenges the status quo. But a recent trip to China introduced a tiny sliver of doubt as to exactly what authority—if any—signed off on the safety of that technology. The Tesla system is clearly built with redundancy—there are two steering motors fed by separate wiring, etc. But the Chinese EV automaker Nio claims that its steer-by-wire system, now in use in its Nio ET9 flaship, is the first in production to have undergone a full safety certification. The company collaborated with other manufacturers to develop a triple-layer redundancy system, one informed by aviation-industry best-practices, that then passed a Chinese government certification program. 0:00 / 0:00 First Level Redundancy At this level, all computer controls, communication, and electromechanical controls are duplicated. This much everybody does. Nio also uses separate electrical architecture zones to control the twin communication and power paths, with an independent monitor comparing signals. In the event of a discrepancy, the monitor determines a 'winner.' Nio, and many others offering steer-by wire use a single motor with multiple phases in the winding, wired to the disparate control systems—either of which has sufficient power to steer the vehicle (other systems provide for a fail-safe mechanical shaft connection). There are separate DC-DC converters, separate CAN bus connections, multiple steering torque sensors, and steering-yoke position sensors. See All 6 Photos Tesla Rear Steering Rack Second Level Redundancy Here's where we believe the Nio approach deviates from Tesla's in following aviation's lead. The separate zones and their communications networks were developed by different teams and sourced from different suppliers whenever possible. This helps minimize the chance of a common failure mode or use-case scenario crippling both systems at the same time. See All 6 Photos Tesla Cybertruck showing front and rear tires at max turning angle. Third Level Redundancy In an absolute worst-case scenario when a steering order fails to be executed by either of these disparate control, communication, and execution systems, the computer is programmed to utilize other approaches to execute the intended steering request. This can include activating the rear steering (which the ET9 and Cybertruck are both equipped with), and/or heavily braking one or both inside wheels on the side in which the car is intended to steer. See All 6 Photos Nio ET9 luxury sedan steering wheel. Measuring Results During the lengthy development of the Nio ET9's steering system, the company and the homologation reps from the government considered the job done when recorded failures could be measured in events-per-trillion-hours of operation. We're eager to learn more about the various layers of redundancy Tesla employs, and we'd love to know how Tesla's system would fare if subjected to this same new Chinese homologation testing, but for now the Cybertruck's form factor is disallowed in China.
Yahoo
7 days ago
- Automotive
- Yahoo
China auto shares sink after BYD offers trade-in incentives
SHANGHAI (Reuters) -Shares in Chinese automakers such as BYD, Nio and Geely tumbled on Monday after industry leader BYD offered fresh incentives on over 20 models and the CEO of Great Wall Motors warned that the world's largest auto industry was in an unhealthy state. The Hong Kong-listed shares of BYD Co Ltd closed 8.6% lower, while Geely Auto fell 9.5%. Others, such as Nio and Leapmotor, closed between 3% and 8.5% lower. A years-long price war in the world's largest automotive market has only continued to intensify, with carmakers continuing to cut prices and offer features previously perceived as premium, such as smart assisted driving, for free. Chinese electric vehicle giant BYD over the weekend announced a fresh round of subsidies and incentives for more than 20 models, which reduced the starting price of its cheapest model, the pure battery-powered Seagull hatchback, to 55,800 yuan ($7,765). Customers have to trade-in their old cars to get the subsidies, a customer service officer told Reuters. Geely followed suit with similar incentives on Monday. On Friday, Wei Jianjun, the chairman of Great Wall Motor, warned that the Chinese auto industry had its own "Evergrande", referring to the debt-laden developer that became the centre of a liquidity crisis in China's property sector. "Now, Evergrande in the automobile industry already exists, but it has not collapsed," he told Sina Finance in an interview. He did not name any automakers but said some of the "main manufacturers" in China had put too much effort into pursuing market value and raising their stock prices. Wei, one of the Chinese industry's most outspoken company chiefs, said that the Chinese electric vehicle industry was in an unhealthy state given its heavy losses and how a prolonged price war was weighing on the supply chain. Suppliers were struggling to survive, he added, due to a ongoing pressure to lower prices and delayed payments, and accused carmakers of cutting corners on safety and reliability. "Some products have been reduced from 220,000 yuan to 120,000 yuan in the past few years. What kind of industrial products can be reduced by 100,000 yuan and still have quality assurance? Well this is absolutely impossible," he said, again not naming any companies. Last week, China's state planner warned against excessive competition in some industries, saying that some firms were even selling below cost, disrupting fair competition and warned that it may take corrective action. ($1 = 7.1866 Chinese yuan renminbi)
