DBS Maintains Hold Rating on NIO Inc. (NIO) Stock

On June 5, DBS analyst Rachel Miu maintained a Hold rating on NIO Inc. (NYSE:NIO) and set a price target of HK$38.00. The rating update came after the company reported its unaudited fiscal Q1 2025 results on June 3.

The analyst stated that the company underwent a 19% year-over-year increase in vehicle revenue driven by a 40% rise in vehicle sales. However, lower average selling price because of a change in the product mix is causing challenges for the company’s operations.

A fleet of eco-friendly electric cars, a symbol of the company’s commitment to sustainability.

Miu also reasoned that while NIO Inc. (NYSE:NIO) experienced a minute improvement in its vehicle margin, underperformance in fiscal Q4 2024 and weaker-than-expected guidance for Q1 2025 are anticipated to negatively affect its near-term performance.

NIO Inc. (NYSE:NIO) plans to launch a number of new brands and models in 2025, including the ONVO L90 and Firefly. However, the analyst stated that the transition to a new vehicle platform may trigger inconsistent sales trends until the stabilization of the production process.

The analyst thus expects the non-GAAP net loss for fiscal year 2025 to widen, prompted by the expected rise in costs associated with the new stores, R&D, and brand marketing.

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