The electric vehicle (EV) market is facing both significant growth and major obstacles as manufacturers struggle to tame high costs and technological hurdles, such as battery longevity, charging times, and vehicle range.
The Shanghai-based Nio Inc (NIO) is no exception.
Unlike the Teslas and BYDs of the world, NIO stock has had a brutal 2024 due to shaky financial results, major analyst downgrades, and slowing EV demand in its home market of China.
As of Dec. 27, NIO stock was down nearly 50% year-to-date to trade around $4.55. Looking ahead to 2025, analysts say NIO stock could have a shaky recovery as it struggles for market share in an increasingly crowded EV industry.
NIO stock price predictions for 2025
| Forecaster | Price prediction for 2025 |
| Goldman Sachs | $3.90 |
| Bernstein SocGen Group | $4.50 |
| Macquarie | $4.80 |
| Zacks Investment Research | $5.78 |
| Deutsche Bank | $9.00 |
There’s no clear consensus on where NIO’s stock price could end up in 2025. Analysts at Goldman Sachs have flipped bearish on the company as NIO struggles to meet its vehicle delivery projections for 2025.
According to Goldman’s analysts, NIO will probably ship 337,000 vehicles next year, which is well below the manufacturer’s expectations of between 443,000 and 449,000.
A “limited” lineup of new car models means EV shoppers will probably look to NIO’s competitors for their next purchase, Goldman said.
“We are sell-rated and expect lukewarm order momentum, slow production ramp-up and delivery volume, and intensifying price competition to be downside stock price catalysts,” said Goldman analyst Tina Hou.
Bernstein SocGen Group, an equity research firm part of Societe Generale, also slashed NIO’s forecast by 10% to $4.50 a share.
The downgrade came after NIO’s mixed third-quarter earnings report showed rising car sales but a lower average selling price, higher revenues but also higher expenses, and a net loss that failed to shrink as expected.
These results prompted NIO’s management to temper expectations for the fourth quarter.
Macquarie expressed similar concerns following NIO’s financial results, reducing the stock’s target price by nearly 30% to $4.80.
Like others, Macquarie has warned that NIO is at a disadvantage due to growing competition in the EV market. The investment bank also said demand for the company’s Onvo model has been negatively impacted by supply chain disruptions.
Looking beyond the news-driven headlines, Zacks Investment Research suggests that NIO stock is poised to rebound in 2025.
After compiling the short-term price targets of more than a dozen analysts, Zacks gave NIO a target of $5.78, which is 23% higher than current levels.
The caveat is that Zacks’ price target is based on aggregated forecasts from various Wall Street firms, not an independent analysis of what could be driving NIO stock.
Despite analysts’ concerns, not everyone is bearish on NIO. Deutsche Bank expects NIO’s stock price to double to $9.00 in 2025, driven by solid sales of its existing and new car models.
Analysts at Deutsche expect NIO to sell 450,000 vehicles in 2024, including 219,000 units of its new Onvo line. That’s a marked improvement from Deutsche’s previous forecast, which called for just 330,000 unit sales next year.
The investment bank believes NIO will also benefit from five product upgrades in the second half of next year, including a major upgrade to its ES7 SUV.
4 things to watch next year
The global economy is transitioning to fully electric and plug-in hybrids, but the pace of growth has been slower than many analysts had anticipated.
For example, BloombergNEF expected global EV sales to reach roughly 16.7 million units in 2024, but the actual sales figure was closer to 15.2 million, according to researcher Rho Motion.
Although many legacy automakers have shifted their electrification strategies due to higher costs and a lack of charging infrastructure development, EV manufacturers like NIO don’t have that luxury.
They’re facing the cost challenges head-on, making it harder for them to offer more affordable vehicles to their customers.
NIO’s success in 2025 will likely depend on four interrelated factors:
- Market competition
- China demand
- Company vehicle sales
- Innovation and product development
Market competition
EV demand may be growing less than expected, but the industry has already attracted dozens of companies seeking to capitalize on the clean energy transition.
When it comes to the global EV market share, NIO barely scratched the surface.
According to a 2023 estimate, NIO accounted for just 1.6% of global EV sales. To make up ground on EV heavyweights like Tesla and BYD, NIO has to leapfrog industry giants like BMW, Stellantis, Renault-Nissan-Mitsubishi Alliance, and several Chinese EV firms.
NIO has ramped up its competitiveness with the launch of its ET9 and Firefly models. ET9 is a luxury model intended to compete with Mercedes-Benz and Porsche, while Firefly is aimed at the more budget-conscious driver.
China demand
NIO is more competitive in its home market of China, but it still accounts for just 2.1% of all EVs sold in the country as of 2023. This places it in the ninth position, well behind companies like Li Auto, Changan, SAIC-GM-Wuling, and Geely.
By comparison, BYD sold more than 10 times as many cars in China as NIO. It’s estimated that BYD owns 35% of China’s EV market, with Tesla a distant second at 7.8%. Both companies carry far more brand recognition than NIO.
The good news is that China has a very large addressable market for EVs. For example, in July 2024, EVs accounted for more than 50% of China’s new vehicle sales for the first time. The trend continued in August, with EVs accounting for 54% of new vehicle sales.
NIO needs to gobble up a bigger share of the Chinese market to convince investors it can compete with more established players.
Vehicle sales
It’d be impossible to quantify NIO’s success without factoring in car sales.
The company has lofty delivery targets, but not everyone agrees they’ll be met. This is where Goldman Sachs and Deutsche Bank diverge (and so do their target forecasts for NIO stock).
The encouraging sign is that NIO’s vehicle deliveries have increased every year going back to 2018, from 11,348 to 190,832 by Nov. 30, 2024.
Over the last two years, NIO’s annual vehicle deliveries have grown by at least 30%.
If Deutsche Bank is correct, NIO’s sales could double in 2025 to 450,000 units. This forecast largely hinges on the success of the company’s Onvo brand, which is expected to average 20,000 deliveries monthly.
Innovation and product development
Like other EV makers, NIO is under enormous pressure to deliver new models that appeal to a wide range of drivers. Consumers also expect improved battery efficiency, range, and advanced autonomous driving capabilities.
The company already boasts impressive battery-swapping technology, which reduces charging time and vehicle downtime. Advanced driving features and a proprietary in-vehicle AI assistant also make for a smoother driving experience.
Despite boasting impressive features, NIO still relies heavily on price cuts to drive sales. This was the main driver of the company’s sales boost in the third quarter. The average selling price of NIO vehicles has been below both market expectations and the company’s own projections.
In such a crowded market for EVs, NIO needs to do a lot more to woo consumers.