Finance

Nio Faces 30% Surge in Net Loss Amid Rising Costs: What It Means for Investors

2025-06-03

Author: Jia

In a significant financial update, Nio has reported a staggering net loss of RMB 6.75 billion (approximately $930 million) for the first quarter, marking a 30.19% jump compared to the same period last year. This loss, however, represents a slight decline of 5.08% from the previous quarter of 2024.

The rise in losses was largely driven by soaring research and development (R&D) and marketing expenses. In total, the company logged an adjusted net loss of RMB 6.28 billion, showing a year-on-year increase of 28.1% while managing a minor decrease of 5.2% quarter-over-quarter.

Nio's revenue for the first quarter fell short of expectations, coming in at RMB 12.03 billion, below analyst predictions of RMB 12.35 billion and outside its own guidance range of RMB 12.37 billion to RMB 12.86 billion. Despite this, revenue showed a strong 21.46% increase from Q1 2024, although it plummeted by nearly 39% compared to the last quarter.

Sales from vehicles contributed RMB 9.94 billion, up 18.6% year-on-year but down a dramatic 43.1% from Q4 2024. The increase in automotive revenue stemmed from a boost in deliveries, but this was countered by falling average vehicle prices due to shifts in product mix. Seasonal factors played a role in the decreased delivery volumes when comparing to the higher sales period of the fourth quarter.

Nio successfully delivered 42,094 vehicles in the first quarter, aligning with its expectations of 41,000 to 43,000. This figure represents a notable 40.07% increase from last year's first quarter but a substantial 42.09% drop from Q4 2024 numbers. Breaking down the deliveries, Nio’s main brand only shipped 27,313 vehicles, down 9.12% year-on-year and 48.23% from the prior quarter.

On the cost side, Nio reported sales costs of RMB 11.1 billion—a rise of 18% from last year but down 36.1% from the previous quarter. The slight drop in costs relative to the fourth quarter reflects the reduced delivery volumes, though year-over-year increases can be attributed to a greater number of vehicles sold.

The company's first-quarter gross profit, while up 88.5% from Q1 2024, still fell 60.2% sequentially, resulting in a gross margin of 7.6%. Vehicles generated a margin of 10.2%, a modest increase from the same time last year but lower than Q4's margin.

Nio is also investing heavily in its future, spending RMB 3.18 billion on R&D for the first quarter—a rise of 11.1% year-on-year but showing a slight decrease compared to the last quarter.

On the administrative side, selling, general, and administrative (SG&A) expenses soared to RMB 4.4 billion, up 46.8% from Q1 2024.

Despite facing operating cash outflows and a situation where current liabilities exceed current assets, Nio's cash reserves amounted to RMB 26 billion by March 31, 2025. The company is navigating through challenging financial waters but remains optimistic.

Looking ahead, Nio projects second-quarter vehicle deliveries to range between 72,000 and 75,000 units—a potential rise of 25.5% to 30.7% year-on-year. Revenue forecasts for the upcoming quarter are poised to land between RMB 19.5 billion and RMB 20.07 billion, indicating a healthy increase compared to last year.

As Nio strives to stabilize its financial footing while expanding its footprint in a competitive EV market, investors will be keenly watching how these developments unfold.