Barclays commented on the first quarter results of the Chinese EV maker Nio saying the company’s target of 50,000 monthly sales across both Nio and Onvo brands in Q4 is “challenging.”
In a new research note sent out to clients on Wednesday, the analyst Jiong Shao cited “the intensifying competition in China.”
Shao added that “achieving volume scale is fundamental to improving margins” in the path to profitability — a goal reiterated by Nio‘s founder and chief executive William Li at the earnings call.
The analyst cut the price target on the stock to $3.00 from $4.00, turning bearish on the shares. The stock closed at $3.53 on Tuesday, indicating that Barclay’s new target implies a downside of roughly 15%.
The analyst, who maintained a ‘Underweight’ rating on Nio shares, noted that vehicle gross margin declined to 10%, while adjusted operating and net margins widened to around -50%.
Shao said the figures were “still far from 4Q25’s breakeven target.”
“First-quarter revenue came in 5% below our estimate and missed company guidance,” Shao wrote, citing a lower average selling price driven by “increased promotions to clear inventory of older Nio models” and a higher proportion of sales from the Onvo brand.
Despite missing Barclay’s expectations in some of the metrics, the bank noted that the EV maker “has implemented a series of cost-efficiency measures since March, including reorganization and cross-brand integration.”
“We expect operating efficiency to improve from 2Q,” Shao wrote.
Barclays said the improvements are not enough to ease concerns, noting that the full-year delivery target of around 440,000 units and the fourth-quarter breakeven goal “remain challenging.”
Li said the group expects monthly deliveries of 25,000 vehicles for its core Nio brand in the fourth quarter, supported by the launch of four refreshed models in May and an upgraded version of the ES8 SUV.
The Onvo sub-brand, which targets family buyers, is also aiming to reach 25,000 monthly deliveries in the same period, with two new models — the L80 and L90 — scheduled for launch in the third and fourth quarters.
Commenting on Nio’s international expansion, the analyst noted that “management didn’t set high expectations,” while praising cross-brand integration, the focus on cost efficiency, and the ramp-up in Onvo and Firefly deliveries.
Looking ahead, Barclays is eyeing sales figures of the new models under Nio and Onvo brands but also the expansion of the Firefly brand starting from next quarter and vehicle margin improvement heading to the breakeven target in last quarter of the year.
Earlier this Wednesday, Macquarie also reduced its price target on Nio, saying “concerns over unabated cash burn remain.”
Despite the price target reductions, Nio’s U.S.-listed shares are rising 9% at $3.85.
