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Could Buying Nio Stock Today Set You Up for Life?

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Nio (NYSE: NIO) has been a wildly volatile stock since its IPO in 2018. The Chinese maker of electric vehicles went public at $6.26 per share, and it skyrocketed tenfold to a record high of $62.84 during the buying frenzy in meme stocks in February 2021.

However, as of this writing, Nio’s stock trades at about $5 per share. The bulls retreated as its deliveries cooled off, its margins shrank, and it racked up steep losses. Could scooping up some shares of this unloved stock below its IPO price help set you up for life?

Nio's Eve concept car.
Nio’s Eve concept car. Image source: Nio.

Nio produces a wide range of electric sedans

and SUVs. It differentiates itself from its competitors with its swappable batteries, which can be quickly replaced at its own battery swapping stations as a faster alternative to traditional chargers.

Nio delivered its first vehicles in 2018, and its annual deliveries surged nearly 11-fold from 2019 to 2024. But after more than doubling its annual deliveries in 2020 and 2021, its deliveries decelerated significantly in 2022 and 2023 as it struggled with supply chain constraints, tougher competition, and China’s economic slowdown.

Metric

2019

2020

2021

2022

2023

2024

Deliveries

20,565

43,728

91,429

122,486

160,038

221,970

Growth (YOY)

81%

113%

109%

34%

31%

39%

Data source: Nio. YOY = Year over year.

Nio’s annual vehicle margin, which had reached a record high of 20.2% in 2021, also shrank to 13.7% in 2022 and 9.5% in 2023 as its pricing power waned. Its annual net loss more than quadrupled from 2021 to 2023. All of those challenges — along with trade tensions and rising interest rates — drove away bulls.

After two years of slowing growth, Nio’s growth in deliveries accelerated again in 2024. Its business stabilized as it grew its market share in China and expanded in Europe.

That recovery was driven by its stable sales of its ET sedans, ES SUVs, and EC crossovers, as well as the launch of its lower-end Onvo L60, which resembles Tesla‘s (NASDAQ: TSLA) Model Y but starts at just 149,900 yuan ($20,646). It also continues to expand across Europe even as it faces higher tariffs on Chinese-made EVs across the region.

But despite that pressure, Nio’s quarterly vehicle margins stabilized in 2024, growing from 9.2% in the first quarter to 12.2% in the second quarter and 13.1% in the third quarter. It expects that figure to rise again to 15% when it posts its fourth-quarter earnings report on March 21. It attributes that recovery to its lower material costs and its rising sales of premium vehicles (including its ET7 Executive Edition sedan) in China, which largely offset its lower average selling prices.

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2025-03-16 22:54:00

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