Nio (NYSE:NIO)‘s Q3 2025 earnings report was a bit of a mixed bag last week, as the company missed revenue expectations and nudged its Q4 delivery outlook lower.
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Specifically, NIO reported Q3 revenue of RMB 21.8 billion ($3.06 billion). While this was up 17% year-over-year and 15% quarter-over-quarter, it fell short of analysts’ estimates. Vehicle deliveries reached 87,000 units, rising 41% YoY and 21% QoQ, but its average selling price (ASP) slipped to RMB 221,000, down 18% YoY and 2% sequentially, reflecting a greater mix of lower-priced Firefly and ONVO models, which accounted for 58% of sales.
On the positive side, gross margin exceeded expectations at 13.9%, with vehicle margin jumping from 10.3% in Q2 to 14.7%. This improvement stemmed from better scale, cost savings from model updates, and reduced discounting. The adj. net loss narrowed to RMB 2.73 billion, compared with RMB 4.6 billion a year ago, leading to an adj. EPADS of -$0.15—beating the consensus by $0.07.
Looking ahead, NIO guided for Q4 revenue of RMB 32.75 billion ($4.6 billion) to RMB 34.04 billion ($4.8 billion), below expectations of RMB 34.7 billion, as the delivery outlook was cut by roughly 20% to 120,000–125,000 units from 150,000 previously.
Bernstein analyst Eunice Lee noted that this forecast implies monthly deliveries of 40,000–42,000 units for November and December, essentially flat compared to October’s 40,000 units. This is “a tad weak” in her view, given typical year-end seasonality. The analyst also pointed out that NIO raised its vehicle margin guide from 16–17% to 18%, supported by a higher mix of ES8 models (which carry a 20% margin), lower non-GAAP R&D spending of RMB 2 billion, and SG&A around 12% of revenue (~RMB 4 billion). Management remains confident it can achieve non-GAAP profit breakeven for Q4 and FY26.
All in all, Lee strikes a note of caution.
“While breakeven may be attainable for Q4 through non-GAAP adjustments and further cost cuts, we remain cautious about the outlook and the sustainability of healthy breakeven levels in FY 2026,” the analyst opined. “We are particularly concerned that some cost reductions, especially in R&D, could impact the company’s long-term position and technological competitiveness.”
Bottom line, although NIO shares have slid some 30% from their October peak, Lee thinks it’s best to stay on the sidelines for now. She maintains a Market-Perform (i.e., Neutral) rating and a $5.50 price target, suggesting the stock is fairly valued at current levels. (To watch Lee’s track record, click here)
The Street’s average target of $6.67 is a bit more optimistic, pointing toward one-year returns north of 20%. All told, the stock claims a Moderate Buy consensus rating, based on a mix of 5 Buys, 7 Holds and 1 Sell. (See Nio stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.