NIO Inc. shares declined 1.4% to $4.97 in U.S. premarket activity following an announcement from China's State Administration for Market Regulation. The regulator has mandated a recall of 246,229 vehicles to address a software malfunction that may cause instrument cluster and central control screens to go dark briefly.
Recall Details and Remediation Plan
The recall affects NIO's ES8, ES6, and EC6 models manufactured between March 16, 2018, and January 16, 2023. The company plans to deploy over-the-air software updates to resolve the issue remotely, with service center visits reserved for cases where remote fixes prove insufficient.
This development arrives at a sensitive juncture for electric vehicle manufacturers, as increasing vehicle functionality becomes software-dependent and regulators grow more vigilant about safety-related bugs. For NIO, quality control concerns emerge just as investors focus on the company's ability to maintain its recent momentum and translate stronger delivery numbers into sustainable profit margins.
Financial Context and Market Reaction
Earlier this month, NIO indicated it might achieve its first quarterly adjusted operating profit in Q4 2025, citing improved sales, favorable model mix, and ongoing cost reductions. However, these figures remain preliminary and unaudited.
The stock had surged 7.23% to $5.04 on Friday with heavy trading volume of approximately 90.7 million shares, according to market data. The recall now introduces uncertainty regarding potential costs and the number of vehicles requiring physical service intervention.
Investors await clarification on the financial impact of the recall, its timing, and a firm schedule for both Q4 and full-year 2025 results. While some analysts suggest a potential earnings release around March 20, the company has not confirmed this date.
