TLDR
- NIO shares jumped over 7% on Tuesday, reaching a new 21-month high of $7.78, the highest level since late 2023
- The EV maker secured over 10,000 orders last week and set a new weekly sales record with 10,800 vehicles delivered between September 22-28
- Shares have more than doubled from a five-year low of $3.02 in April, driven by strong demand for the three-row Onvo L90
- NIO raised $1.16 billion through an equity offering this month to strengthen its balance sheet and fund battery swapping technology
- The company expects to reach its first profitable quarter in Q4 while targeting 150,000 deliveries across its three brands
NIO shares climbed over 7% in early Tuesday trading. The stock hit $7.78, marking its highest level in 21 months.
The Hong Kong-listed shares gained 3% earlier in the day, closing at HK$57.40. This continues a rally that started in July.
The jump follows news that NIO’s three brands received more than 10,000 orders last week. Ma Lin, the company’s Assistant Vice President of Brand and Communication, suggested the actual number might be higher.
NIO Group delivered 10,800 vehicles between September 22 and 28. This represents a 61.2% increase from the previous week’s 6,700 units.
The stock has recovered from a five-year low of $3.02 reached last April. Since then, shares have more than doubled in value.
Strong demand for the recently launched three-row Onvo L90 has fueled the rally. The company also set a monthly deliveries record in August.
Recent Fundraising and Financial Strategy
NIO stock completed an equity offering earlier this month. The company raised $1.16 billion through the transaction.
The capital will strengthen NIO’s balance sheet. It will also fund continued investment in products and battery swapping technology.
Goldman Sachs projects the new capital will reduce NIO’s debt ratio from 98% to 92%. The investment bank expects R&D spending to reach 11 billion yuan ($1.4 billion) in both 2025 and 2026.
William Li, the company’s founder and CEO, aims for the first profitable quarter in Q4. The strategy includes increasing sales while cutting investments, fixed costs, and R&D expenses.
For the current quarter, analysts expect NIO to post a loss of $0.24 per share. This represents a 33.3% improvement year-over-year.
The consensus earnings estimate for the current fiscal year stands at -$0.99 per share. Next year’s estimate projects earnings of $0.27 per share.
Production Ramp and Order Backlog
NIO is ramping up production of its latest large SUVs. The focus is on the Onvo L90 and third-generation ES8.
The company operates two factories in Hefei for its three brands: the premium NIO brand, Onvo, and Firefly. Local reports indicate a third factory in Anhui Province has quietly begun production.
The newly launched ES8 SUV sold out its 40,000-unit production capacity for 2025 in just 9 minutes. New orders from last week face waiting times of 24 to 26 weeks.
NIO announced it will use 100kWh battery packs to speed up ES8 deliveries. This move will temporarily limit supply at battery swap stations.
The consensus sales estimate for the current quarter is $3.23 billion. This indicates a 21.2% year-over-year increase.
For the full fiscal year, analysts project revenues of $13.37 billion. Next year’s estimate stands at $19.4 billion.
Management set a target of 150,000 deliveries for Q4 across all three brands. The company expects to deliver between 34,678 and 38,678 vehicles in September alone.
Through September 28, NIO sold 29,910 vehicles in China. The final two days of the month and overseas sales have not been disclosed yet.
The company is scheduled to report its monthly sales figures on Wednesday, October 1. NIO’s stock carries a Zacks Rank of #3 (Hold).
