NIO (NIO, Financials) just turned in its best quarter in a while; and while the stock barely budged, long-term bulls have a reason to feel a little lighter. The Chinese EV maker said it delivered 24,925 vehicles in June a 17.5% jump from the same month last year. Stack that onto Q2 totals, and deliveries are now up more than 25% year over year; no small feat given the price wars still raging across China’s EV landscape.
The breakdown tells a story of expansion. NIO’s flagship premium line delivered 14,593 vehicles; ONVO its newer, family-first sub-brand added 6,400 units; and the final 3,932 vehicles came from other models across the lineup. It’s no longer just about luxury sedans; NIO’s aiming for driveways beyond downtown Beijing and Shanghai and it’s starting to show.
Still, the market didn’t celebrate; shares were flat in early trading. That’s probably less about the numbers and more about the bigger picture; Chinese EV stocks are under pressure, and sentiment’s been shaky for months. Even with a solid quarter, investors are watching macro trends; not just monthly stats.
Behind the delivery beat is a company that’s been quietly pushing through a gauntlet chip shortages; battery cost swings; tightening margins; and aggressive discounting from bigger rivals like BYD and Tesla. Despite that, NIO has managed to maintain volume growth; and that’s not just luck it’s execution.
But volume doesn’t pay the bills margins do. And for NIO, margins are still under fire; especially as it tries to scale battery swap stations and double down on software integration. These are bold bets; necessary ones perhaps but costly all the same. Whether these investments pay off depends on what happens in the back half of the year; Q2 was strong, but the follow-through matters more.
Subsidy shifts from Beijing haven’t helped either; with policymakers now favoring strategic tech over blanket EV support, companies like NIO have to prove they belong on the winner’s list not just the participation chart.
That’s the backdrop heading into Q3; a decent quarter on paper, yes but one that demands careful reading between the lines. Growth is holding; but costs, competition, and consumer fatigue are all pressing in.
This article first appeared on GuruFocus.