Nio (NYSE:NIO) reported its Q1 2025 results, and while the top-line growth may turn heads, the underlying financial story remains tough to ignore. Vehicle deliveries surged 40.1% year-over-year to 42,094 units, lifted by momentum from its upgraded product lineup and new entrants like the Firefly. Total revenue rose to RMB12.03 billion (US$1.66 billion), up 21.5% YoY. Gross margin improved to 7.6%, a modest lift driven by parts and services revenue. But dig deeper, and the cracks show: Nio posted a net loss of RMB6.75 billion (US$930 million), up over 30% from a year ago. Even when stripping out share-based comp, adjusted net loss still ballooned.
And this isn’t new. A look at the past 10 quarters shows a persistent patternrevenue going up, losses following right behind. The chart tells the story loud and clear: each quarter sees higher revenue bars… paired with stubbornly red net income and EBITDA lines. Operating costs, particularly R&D and SG&A, continue to weigh down profitability.
Despite management’s cost control efforts, operational losses ticked up again this quarter. That means the more Nio grows, the more money it burns. The business model is still stuck in a phase where scale hasn’t yet translated to margin improvement.
That said, Nio isn’t slowing down. April and May combined deliveries hit nearly 47,000, and Q2 guidance suggests up to 75,000 vehicles on deck. The company is betting on volume, vertical integration, and proprietary techlike its in-house smart driving chips and NIO World Modelto drive the next chapter. But until those bets start bending the cost curve, Nio will remain a growth story with a profitability question mark. For investors, it’s a name to keep on the radarbut only if you’re prepared for the ride.
This article first appeared on GuruFocus.