Macquarie analyst Eugene Hsiao upgraded Nio to Outperform from Neutral, citing stronger-than-expected demand for the ES8 SUV and growing adoption of the company’s battery leasing program, which improves the outlook.
“4Q25 sales reached the high-end of 125k guidance as strong ES8 and Firefly demand drove 44% QoQ volume growth,” Hsiao wrote in a research note.
Macquarie’s analyst increased his price target on Nio shares by 15% to $6.10 — implying an upside potential of 31.5% based on Thursday’s closing price.
The analyst lifted his 2026 volume forecast by 7% to 451,000 vehicles, citing momentum from the third-generation ES8 and rising participation in Nio‘s Battery as a Service program.
“Rising use of BaaS (>80%) could better insulate the company from industry headwinds as potential higher battery costs are held off balance sheet,” Hsiao wrote.
Average prices fell 8% in 2025 to $108 per kilowatt-hour, according to BloombergNEF‘s annual survey.
Prices in China dropped 13% to $84/kWh last year with the survey citing lower input costs, overcapacity, intense competition, and preference for lower-cost lithium iron phosphate cells as the main reasons for the decline.
Nio‘s BaaS program allows customers to purchase vehicles without the battery, which is then leased for a monthly fee.
The model enables owners to upgrade to larger battery packs for extended travel and later downgrade to a standard 75kWh pack for daily use.
Record Deliveries
Nio Group delivered 326,028 vehicles across its three brands in 2025, up 46.9% year over year.
The total included 178,806 units under the premium Nio brand, 107,808 units under the mass-market Onvo brand, and 39,414 Firefly vehicles.
The company delivered 91,429 vehicles in 2021, 122,486 in 2022, 160,038 in 2023, and 221,970 in 2024.
Nio had initially targeted more than 440,000 deliveries for 2025.
Based on Macquarie’s 451,000-unit forecast for 2026, Nio would need to grow deliveries by approximately 38% from 2025 levels.
Profitability in Sight
Nio Chief Executive Officer William Li reaffirmed this week his confidence in the company’s first profitable quarter.
In an internal telling employees to consider the impact of 40,000 third-generation ES8 SUVs delivered with healthy margins.
“Do the math, and you’ll see profitability is achievable,” Li said in an internal speech on Tuesday, according to a transcript shared by local media outlets.
Nio delivered over 43,600 ES8 vehicles between September 21 and year-end, surpassing its internal target of 40,000 units.
Li said earlier this month that he is confident Nio can achieve 40% to 50% annual sales growth over the next three to five years, up from approximately 30% during its second-generation product cycle.
He noted the company’s market share in China remains below 2%, representing “at least fivefold room for growth.”
Nio plans to launch three new models this year, led by the flagship ES9.
Besides the 5.4 meters long SUV, the Group will also release two large five seat SUVs: a facelift of the ES7 under the Nio brand and the L80 under the Onvo sub-brand.
The ES7 was seen being transported in China earlier this week as the launch nears.
