Nio 2024Q4 earnings report interpretation - Breaking the cocoon and reborn, After extreme bad luck comes good luck.

The market is closely watching Nio's 2024Q4 and annual report released today. With intensifying market competition, increasing supply chain pressures, and global economic uncertainties, there's no doubt that Nio is facing significant challenges. However, despite this, judging from the financial performance of Q4 2024 and the company's strategic layout, Nio still holds several cards and may even have a rebound opportunity during this downturn.

From the financial data, Nio's annual deliveries reached 221,970 units, a 38.7% year-over-year increase, setting a new historical record. Q4 deliveries also hit a new high at 72,689 units.

Chart: Nio's Historical Sales

Meanwhile, Nio's revenue and gross margin also saw year-over-year growth. Q4 revenue reached 19.7 billion yuan, up 15% YoY, while annual revenue stood at 65.73 billion yuan, an 18.2% increase.

Chart: Nio's Revenue Data

In terms of gross margin, continuous improvements were observed. Q4 vehicle gross margin rose to 13%, with the overall gross margin reaching 12%, exceeding market expectations. The annual vehicle gross margin stabilized at 12%, and the overall gross margin approached 10%.

Chart: Nio's Gross Margin Data

Of course, today's focus isn't on speculating about Nio based solely on data. After all, people tend to be habitual—optimistic predictions are often made based on strong data, while pessimistic forecasts stem from mediocre figures. However, in the ever-changing EV industry, where consumer preferences vary widely, such habits can be harmful. For example, last year, the market generally overestimated Li Auto and underestimated XPeng and Xiaomi, leading to missed investment opportunities.

So today, let's look at Nio beyond the numbers. Whether you like the company or not, two things are unavoidable when discussing Nio:

1. Battery Swap Experience: No matter how much fast-charging improves, I believe battery swap remains second only to home charging and surpasses fast-charging in user experience.

As of now, Nio has built 3,167 battery swap stations, forming a high-speed network of 9 vertical and 9 horizontal routes across 14 major city clusters, with nearly 1,000 highway swap stations connecting over 700 cities nationwide. By June 30, 2025, Nio plans to complete county-wide coverage in 14 provincial-level regions, including Beijing, Shanghai, and Guangdong, spanning over 1,200 counties. By December 31, 2025, it aims to achieve full coverage in 27 provincial-level regions and over 2,300 counties.

The strong investment and excellent experience in energy replenishment are likely why CATL invested in Nio Energy at this stage—giants don't act without solid reasoning.

2. Brand: In the pure EV market above 300,000 yuan, Nio maintains a stable market share of over 40%, indicating strong appeal to premium users.

In the internet industry, where the Matthew Effect is strong, stable patterns are hard to reverse. However, the EV industry doesn't necessarily follow this rule, given the diversity of consumer preferences. For instance, Li Auto and Aito, once at their peak, faced pressures last year, while XPeng, once at rock bottom, saw a sales rebound. This industry is hard to predict and even harder to consolidate.

As long as a player remains at the table, anything is possible. And judging by the current situation, Nio still holds several cards and has the potential for a rebound.

1. Continuous Release of New Products

Nio ET9 deliveries have begun; the 2025 Nio "5566" models will launch in Q2; a major new product will debut in the second half of the year.

Ledo L90 will be unveiled in Q2 and delivered in Q3; Ledo's third product will launch in Q4.

The Firefly brand is set to launch in April.

2. Ongoing Implementation of New Technologies

Self-developed chips will be featured in the ET9 and 2025 models, expected to boost gross margins.

3. Deep Organizational Restructuring Underway; Q4 2025 Profitability Target Within Reach

After a year of CBU piloting, after-sales services achieved full-year profitability in 2024.

Platform-based production for three brands has significantly improved reuse rates and slashed supply chain costs.

R&D expenses now support three brands, entering a "dividend harvest phase" in technological investment.

Organizational reforms are deepening, continuously improving efficiency.

4. Enhanced Cost Control: Economies of Scale + Supply Chain Cost Reduction

Economies of scale are emerging, with sales growth diluting fixed costs (production lines, R&D expenses), lowering unit costs, and driving gross margin improvements.

Ongoing supply chain optimization strengthens bargaining power with suppliers, coupled with technical cost reductions and higher component reuse rates.

5. Economies of Scale Under Three-Brand Operation; 2025 Sales Doubling Is Realistic

Nio continues to lead the premium pure EV market, maintaining over 40% share in the 300,000+ yuan segment. The switch to NT3.0 this year will sustain growth from 2024.

Ledo is scaling up, with the L60 surpassing 10,000 deliveries in December last year. Two new family SUVs will further boost sales this year.

The ET9 Founder’s Edition, sold out on launch day, will be delivered in March.

The Firefly brand’s namesake model will officially launch and deliver in April 2025, with pre-orders already exceeding expectations. Global expansion will bring additional volume, contributing thousands of units monthly.

The full-blooded SkyOS·Tianshu vehicle-wide operating system, autonomous driving chips, and end-to-end urban ADAS powered by world models will roll out, continuously enhancing product strength.

Finally:

Profitability in the auto industry is tricky—it requires massive investments. But it can also be straightforward: 300,000 annual sales is the baseline. One hit model can turn the company profitable, and a few more can scale profits significantly.

Li Auto and Leapmotor started turning profits at around 300,000 annual sales, and Xiaomi is expected to follow suit. With Nio’s organizational adjustments this year, shedding non-strategic loss-making businesses and focusing on selling each model well, the Q4 2025 profitability target isn’t out of reach.

Once sales rise and breakeven is achieved, Nio’s confidence and funding issues will resolve themselves.

As the saying goes, "After extreme adversity comes prosperity." Looking forward to Nio’s performance this year. $NIO Inc(NIO.US) $NIO-SW(09866.HK)