To The Moon

Chinese EV maker $NIO Inc.(NIO)$ is set to report its Q2 2025 earnings on Tue, 02 Sep 2025.

It will be the last of the 3 musketeers, namely $XPeng Inc.(XPEV)$ (19 Aug 2025) and $Li Auto(LI)$ (28 Aug 2025) to report their respective earnings.

Without deep diving into XPEV quarterly earnings (it deserves a post on its own), it has proven to be the comeback kid that was trailing both NIO and Li Auto at one stage.

On the run up to NIO’s latest quarterly earnings, perhaps looking at its deliveries will provide clues to what NIO could possibly be reporting in 2 weeks’ time.

Recap - 2024.

2024 data for monthly deliveries from the NIO Group, down into NIO (luxury) and Onvo (diffusion) lines, reveals several key trends over 2024: (see above)

• Slow Start: January (10,055) and a dip in February (8,132), reflecting typical seasonal effects eg. Chinese New Year, big celebration in China.

• Spring Growth: Deliveries steadily increased from 11,813 in March to 15,620 in April.

• Stable Momentum: May - November saw consistent monthly volumes above 20,000 units.

• Brand Expansion: Onvo officially began deliveries in November, adding to NIO’s total.

• Strong Finish: December deliveries jumped to a record 31,138, boosted by both brands.

Overall, NIO Group demonstrated robust YoY growth in 2024, effective market expansion through Onvo, and ended the year with record-breaking monthly deliveries, positioning itself strongly for 2025.

2025 - So far.

Broader Portfolio:

In 2025, NIO Group now includes 3 brands, namely NIO (luxury), Onvo (diffusion), and Firefly (budget) —expanding its product range compared to 2024.

• Stronger Start: Jan–Feb 2025 deliveries (13,863 & 13,192) both exceeded the prior year (10,055 and 8,132), marking a solid YoY increase in the early months.

• March Growth: March 2025 (15,039) also outpaced March 2024 (11,813), continuing the upward trend.

• Spring Surge: April–June 2025 saw sharp monthly delivery gains; April hit 23,900 vs 15,620 (Apr 2024), May reached 23,231 vs 20,544 (May 2024), and June was 24,925 vs 21,209 (Jun 2024).

• These months delivered much higher volumes compared to the same period last year.

• July Pullback: July 2025 deliveries (21,017), slipped slightly below July 2024 (20,498), though still remaining robust.

• Brand Impact: The visible and increasing contribution from Onvo and the new Firefly brand helped drive NIO year’s growth, particularly in the second quarter.

Compared to 2024, NIO Group’s 2025 monthly deliveries are consistently higher in every month so far, thanks to its more diversified brand lineup and strong demand, especially in Q2.

Quarterly Delivery.

Overall, NIO has delivered between 72,000 - 75,000 EVs for Q2 2025, . This is in lined with its guidance and up +72% QoQ and +26% YoY.

As a result, Morgan Stanley is expecting:

• Q2 revenue: come in at between 19.5 - 20.1 billion yuan or (US$2.71 - US$2.80 billion), that is also in line with the company’s forecast.

Q3 Guidance / Outlook.

Morgan Stanley’s current quarter outlook:

• Vehicle volume growth: to strengthen to between 8.0% - 11% QoQ or approximately 78 - 80k units, given incremental contribution from a solid Onvo L90 order backlog.

• For July 2025 (Q3 2025’s first calendar month), NIO delivered 21,017 EVs.

• Based on MS’s expected vehicle volume growth less July 2025 deliveries, NIO is to guide for between 56,983 - 58,983 EVs to be delivered in August & September combined.

• Hypothetically, should delivery be at the low limit of 78,000 EVs, NIO would need to average nearly 28,500 units in August & September.

• This will still be a new monthly record for 2025 but below NIO’s December 2024 peak of 31,138 EVs delivered.

• Net loss is expected to narrow to about -RMB 5.5 billion yuan or -US$ 766 million, compared with -RMB 6.9 billion yuan or -US$ 961 million Q1 2025’s loss.

On Thu, 14 Aug 2025, Onvo CEO, Shen Fei, has posted on Weibo that production and deliveries were “still in full swing” and continuously improving the overall battery swap experience.

Excessive R&D Expenditure.

NIO’s biggest mistake was letting its R&D spending get out of control without proper management oversight. (see below)

• In 2017, NIO’s R&D expenses was zero.

• 2 years later in 2019, it has ballooned to US$636 million.

• It peaked at US$1.92 billion in 2023, while revenue for year was only US$7.83 billion, This worked out to NIO spending 24.52% on R&D alone.

In contrast, EV companies on average, tend to spend a significantly less of their revenue on R&D:

• Tesla spend about 5.4% R&D-to-revenue ratio.

• Leading European automakers spend between 3.7% - 6.8% of their revenues on R&D.

• Even world #1 Chinese EV maker $BYD Co., Ltd.(BYDDY)$ spent about 8.5% of revenue in 2024.

It is obvious NIO’s R&D expenditure borders on being outrageous given that profits were not corresponding and the company is still deep in the red.

What CEO Says.

In a separate post, NIO’s CEO William Li Bin tried to socialize and justify NIO’s massive burn rate in R&D expenditure.

The CEO said:

(1) R&D expenditure.

• NIO is entering a “harvest period” after years of heavy investment.

• It aims for profitability by Q4 2025.

• NIO has trimmed R&D spending by -20% to -25% YoY to between 2.0 - 2.5 billion yuan per quarter.

• It maintains strong investment in long-term projects like the ES8 & ET9, that is developed over several years - despite sales lagging.

• Focus will pivot to (a) larger, higher-margin models and (b) expanding connected battery swapping infrastructure in key regions to boost sales.

• He emphasized disciplined cost control with prioritized R&D spending to improve efficiency while driving growth and profitability.

(2) Overseas expansion plan.

NIO failed to meet its 2024 target of opening up in its 25 markets drawn up.

So far, it has made in road to only 7 of 25 markets.

Apparently, the ‘good’ news coming out of NIO is the pace has recently quickened following a strategic shift away from direct sales to a dealership model in Denmark and other new markets across Europe and Southeast Asia.

Case in point.

NIO will finally making its presence felt in Singapore through a dealership with Wearnes Automotive via its budget EV - Firefly.

It has been 2 years, 10 months & 15 days (as of 22 Aug 2025) - in the making after then DPM Lawrence Wong visited NIO’s Hefei plant back in 16 May 2023 and ‘invited’ the Chinese EV maker to enter the Singapore EV market.

NIO’s failure to enter the Singapore EV market earlier shows management lack of foresight on how quickly Singapore recovered from the pandemic.

Perhaps the honour of “Mr Too Late” is more apt for Li Bin instead of Jerome Powell.

My viewpoints: (mine only)

What used to be a promising EV maker back in 2021 after unveiling of its “advanced” ET7 sedan, has all but been a distant memory.

Failure of CEO and Management team (too many to deep dive into) include:

• NIO House (expensive, glorified EV showrooms) and its lifestyle merchandises (polo shirts, caps).

• NIO mobile phone that came in 3 configurations: Performance, Flagship and Expedition editions. It was officially launched on 21 Sep 2023 and died a natural death when it failed to gain traction.

• Nuclear Research Investment: On 19 May 2023, it was reported that NIO via its investment arm NIO Capital RMB 995 million for a 19.9% stake a nuclear fusion startup “Neo Fusion”.

• To date, it is still unclear where is the synergy between the EV maker and the nuclear firm - an unrelated and expensive diversion from NIO’s core EV business.

With the looming Q2 earnings unveil, NIO need to remain steadfast and focus on its sales, by hook or by crook.

NIO’s stock price should rise higher after earnings report is out.

How long this can last is a big unknown, because NIO is like a meme stock nowadays. (see below)

As of 29 Sep 2025

Looking at NIO’s 2025 year-to-date stock price movements:

• It has jumped +40.22%, with fast rises and sharp swings shown on the chart. (see above)

• This pattern, especially the recent August spike, looks like the volatile moves seen in meme stocks, where prices soar quickly due to hype and short-term trading, not company fundamentals.

• The price action suggests heavy speculation and crowd-driven momentum, typical of meme stock behavior.

Lastly, there have been a lot of “positive” reviews about NIO lately based on its sales volume.

I am not particularly impressed yet.

Historically, among the 3 major Chinese EV makers—NIO, Li Auto, and Xpeng, NIO was seen as the most premium.

As a result, each NIO (main line) EV commanded the highest margins in the group.

During the covid period, when $Tesla Motors(TSLA)$ initiated a price-war, the other 2 EV makers joined in the game, except NIO.

Eventually, NIO was forced to lower prices too, losing sales momentum, profit margin, and its leadership position, in the process.

Combined with its out-of-control cash burn, this led to disastrous earnings results, quarter after quarter.

Although sales have picked up, its not from the main line but its 2 diffusion brands - Onvo and Firefly, where profit margin varies. (see below)

Only with (1) continued growth for NIO main line, (2) a drastic ramp-up in Onvo sales, or (3) breakout volume with Firefly, can NIO truly claim a full recovery.

I still harbour hopes of NIO revisiting its January 2021 peak of $66.99 per share as that would vindicate that I have been right about NIO being a gem, all along.

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• Do you think NIO will the comeback kid by end 2025 calendar year?

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