Macquarie sees Chinese electric vehicle maker Nio with increasing competition in the battery electric vehicle (BEV) market as “concerns over unabated cash burn remain.”
The firm lowered its price target on the US-listed shares to $3.90 from $4.70 after the Shanghai-based group reported weaker than expected results for the January-March period.
In a research note, analyst Eugene Hsiao said the figures “missed Bloomberg consensus/MQe [Macquarie estimates] on all key metrics as concerns over unabated cash burn remain.”
Hsiao said the sales and revenue guidance for the second quarter of the year was “in line” with the firm’s estimates.
Nio said it expects to deliver between 72,000 and 75,000 vehicles in the second quarter, implying that June sales figures will range between 24,869 and 27,869 units.
The analyst wrote that the Nio brand “faces more BEV competition” in the premium segment while the more affordable Onvo brand “has yet to generate sustainable volumes.”
In May, Onvo delivered 6,281 vehicles in China, achieving its second best result ever and a growth of over 40% when compared to April figures.
However, the brand is still underperforming based on the 20,000-unit sales target set late last year for March 2025.
“We look for the new L90/L80 in 3Q/4Q,” Hsiao wrote referring to the two new models Onvo will launch in the second half of the year.
On the positive side, the analyst highlighted that Nio “remains committed to its 4Q25 breakeven target via a major organisational restructuring announced over the past few months while looking to tighten R&D spending.”
Macquarie’s analyst warned that cash balance “fell sharply” to 26 billion yuan as of March 31, down from 42 billion yuan by the end of last year — “as Nio saw negative share equity as of 31 March prior to the recent equity raise.”
Nio’s gross margin dropped to 7.6% in the first quarter, well below consensus of 10.6% and Macquarie’s estimate of 12.3%, primarily due to negative scale effects.
“Adjusted net loss of Rmb6.3bn (near peak quarterly loss) was well below -Rmb5.2bn consensus and -Rmb3.4bn MQe on lower gross profit and higher opex,” Hsiao noted.
Cash balances also declined sharply to Rmb26bn at the end of March from Rmb42bn in December. Hsiao warned that “Nio saw negative share equity as of 31 March prior to the recent equity raise,” highlighting ongoing liquidity challenges.
As of the time of writing, Nio shares are trading 2.3% higher on Wednesday’s pre-market trading session at $3.61.
The brokerage said it was reducing its valuation multiples and cutting both Hong Kong and U.S. share price targets by 14% and 17%, respectively.
Hsiao concluded: “We maintain Neutral. While Nio remains committed to its 4Q25 breakeven target via a major organisational restructuring and plans to tighten R&D spending, concerns over liquidity, margins, and Onvo’s ramp persist.”
Nio’s founder and CEO William 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.
