Nio's brand expansion sparks debate on stock potential in 2025

In December 2024, Nio, a Chinese luxury electric vehicle manufacturer, reported impressive results with a record delivery of 31,138 vehicles. This figure represents a significant increase of 73% compared to the same month in the previous year, indicating a robust growth trajectory for the company. This surge in deliveries came as Nio focused on expanding its brand portfolio, successfully launching its value-priced Onvo brand in late September 2024. Onvo's early success is noteworthy, selling 10,528 vehicles in December, a marked increase from the 5,082 units sold in November. The Onvo brand aims to cater to a broader segment of the market, launching its first model, the Onvo L60, which is competitively priced between RMB 200,000 ($28,000) and RMB 300,000 ($42,000). Additionally, Onvo has plans for two new SUVs scheduled for release in 2025, which will provide direct competition to models from other key players such as Li Auto. This strategic move positions Nio to capitalize on the growing demand for electric vehicles in China. Despite these successes, Nio's stock trades at approximately $4.50 per share, valuing the company at about 1x consensus revenues for 2024. Analysts project growth exceeding 20% for 2024 and an even stronger growth rate of over 40% for 2025. This somewhat low valuation raises questions about how the market perceives Nio's potential amid fierce competition from other electric vehicle manufacturers like Li Auto and Xpeng. In comparison, Li Auto achieved 58,513 vehicle deliveries in December 2024, reflecting a 16.2% year-over-year increase, while Xpeng delivered 36,695 vehicles, an impressive 82% rise year-over-year. These figures position Nio amid a competitive landscape, as it aims to establish a stronger foothold in the evolving electric vehicle market.