China's NIO Back in Red Despite Robust EV Sales — Update

By Jiahui Huang

Chinese EV maker NIO doubled sales in the first quarter, but that wasn't enough to stop it from returning to a net loss after posting its first-ever profit at the end of last year.

The company, one of the leading emerging electric-vehicle brands in China, posted a net loss of 496.0 million yuan for the three months ended March, equivalent to $72.9 million. While that was sharply narrower than the 6.89 billion yuan loss recorded a year earlier, it was a step back from the 122.4 million yuan profit the prior quarter that put NIO in the small but growing ranks of profitable EV makers in the world's largest auto market.

Revenue more than doubled to 25.53 billion yuan during the first three months of the year, the company said Thursday, exceeding the top end of its forecast range. The EV maker delivered 83,465 vehicles in the quarter--a near doubling from the previous year and slightly more than its guidance.

Analysts had expected a 1.12 billion yuan loss for the quarter on revenue of 25.69 billion yuan, according to a Visible Alpha poll.

The mixed results underscore the difficulty of achieving sustainable profitability in China's highly competitive market. They also come as NIO, known for its battery-swapping technology, is looking to capture a broader swathe of the EV market with two subbrands, ONVO and Firefly.

While NIO's main brand is focused on the premium segment, ONVO makes more mass-market, family-friendly vehicles and Firefly sells small, high-end EVs.

The Shanghai-based company had come under pressure from sluggish sales and a lack of demand for premium cars last year as it tried to scale sales across its trio of brands. It continued to see strong demand for its flagship premium SUV, however, and both ONVO and Firefly have reported strong sales over the past few months.

Its gross margin stood at 19.0% in the first quarter, indicating strong profitability. That was higher than 17.5% the previous quarter and 7.6% a year earlier.

NIO gave an upbeat outlook for the second quarter. It guided for vehicle deliveries of between 110,000 units and 115,000 units, up 53% to 60% from a year earlier, and said it expects revenue to reach between 32.78 billion yuan and 34.44 billion yuan.

This month, the EV maker began deliveries of the all-electric ONVO L80, a five-seater sport-utility vehicle, whose competitive pricing was a positive surprise for Citi. Analysts at the bank estimate the model's mature monthly sales could reach 13,000 units to 16,000 units, according to a recent note.

If the company's new model launches this year can replicate the success of the ES8 and ONVO L90, it could trigger a fresh rerating for the stock, DBS analysts said in a recent note.

The Chinese EV maker's American depositary receipts were recently 4.5% higher in premarket trading. New York-listed NIO has risen nearly 10% year to date.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

May 21, 2026 07:53 ET (11:53 GMT)