NIO Inc. Q1 2025 Earnings: Revenue Rises on Deliveries, But Losses Deepen as Company Refocuses on Efficiency and Scale
- GordonGekko
- Jun 4
- 3 min read
NIO Inc., the Chinese electric vehicle (EV) maker listed on the NYSE, reported first-quarter 2025 results that highlight both the company’s delivery momentum and its ongoing struggle to balance growth with profitability. While revenue rose year-over-year on stronger vehicle deliveries, NIO widened its net loss due to rising costs and intensifying competition in China’s crowded EV landscape.
Revenue Drivers: ONVO Brand Launch and Delivery Growth
NIO delivered 42,094 vehicles in Q1 2025, a 40.1% increase from the same quarter last year. A key contributor to this growth was the introduction of ONVO, a sub-brand targeting the family SUV segment with more affordable offerings. The new brand accounted for approximately 35% of total deliveries during the quarter, suggesting NIO’s move into the mass-market segment is beginning to gain traction.
The company’s revenue rose 21.5% year-over-year to RMB12.03 billion (US$1.66 billion), driven primarily by vehicle sales of RMB9.94 billion. Though quarterly deliveries declined from the previous quarter due to seasonal factors and a high Q4 2024 base, the year-on-year growth validates NIO’s multi-brand strategy aimed at broadening its addressable market.
The company also benefitted from a richer product mix, with increased uptake in models built on its NT2.0 platform, which supports enhanced driving assistance features and improved battery efficiency. NIO continues to leverage its technology differentiation—especially in battery swap systems and autonomous driving development—as competitive advantages in a highly commoditized EV sector.
Operating Losses and Margin Pressure
Despite revenue growth, NIO posted a wider net loss of RMB6.75 billion (US$930 million), a 30.2% increase from a year earlier. Gross margin stood at 7.6%, up from 4.9% in Q1 2024, but down from 11.7% in Q4 2024. The margin compression was partly due to pricing competition, higher input costs, and early-stage investment in the ONVO brand.
R&D expenses rose 11.1% year-over-year to RMB3.18 billion, reflecting sustained investment in platform upgrades, AI-based driving systems, and battery technology. SG&A expenses increased 46.8% as NIO ramped up marketing and delivery infrastructure to support its multi-brand strategy.
Strategic Priorities: Scaling, Efficiency, and Cost Discipline
To address the persistent losses, NIO has launched a company-wide efficiency program. This includes headcount rationalization, streamlining of product development cycles, and tighter integration of its supply chain. The company stated that it expects to see structural cost improvements beginning in Q2 2025.
Looking ahead, NIO plans to increase utilization at its manufacturing facilities, with a goal of achieving economies of scale across both the NIO and ONVO brands. It is also expanding its battery swap infrastructure and pursuing partnerships to grow software revenue via autonomous driving subscriptions and data services.
NIO reiterated its full-year strategy to focus on three pillars: scaling delivery volume, improving operating leverage, and monetizing its software and ecosystem offerings. Management guided Q2 vehicle deliveries between 72,000 and 75,000 units, and projected revenue of RMB19.5–20.1 billion (US$2.7 billion).
Outlook
While profitability remains a near-term concern, NIO’s Q1 results show that its diversification into lower-cost EVs via ONVO is yielding delivery volume growth. The next challenge lies in executing operational discipline to convert that volume into margin expansion.
As the company transitions from a high-end niche player to a broader mobility platform, its success will depend on scale, technology leadership, and the ability to carve out a profitable business model amid intensifying competition and a shifting regulatory landscape in China.
Disclaimer: This article is for educational and informational purposes only and should not be construed as financial or investment advice. It does not constitute a recommendation to buy, sell, or hold any securities. Readers are encouraged to conduct their own research and consult with a professional financial advisor before making any investment decisions.
