NIO Inc. saw its shares climb 8.6% to $5.71 in New York trading on Wednesday, following the launch of its new ES9 flagship sport utility vehicle and the announcement of basketball legend Yao Ming as the brand ambassador. Trading volume surged past 60 million shares, with the stock reaching an intraday high of $5.79.
The ES9, which NIO describes as China's largest battery-electric SUV, starts at 498,000 yuan (approximately $69,000). Customers can opt for the Battery-as-a-Service plan, reducing the upfront cost to 390,000 yuan by leasing the battery. First deliveries of the initial variant are scheduled for May 28, with a second version expected in July.
This launch represents a pivotal moment for NIO as it seeks to solidify its turnaround story. The company has been under pressure to demonstrate that its premium models can drive both delivery volumes and profit margins. NIO's vehicle margin improved to 18.8% in the first quarter, a positive sign as it navigates intense competition in China's electric vehicle market.
NIO reported first-quarter deliveries of 83,465 vehicles, a 98.3% year-over-year increase but a 33.1% decline from the previous quarter. Revenue for the quarter reached 25.53 billion yuan. The company guided for second-quarter deliveries between 110,000 and 115,000 vehicles, with revenue projected between 32.78 billion and 34.44 billion yuan.
CEO William Li emphasized that NIO is in an "intensive new product launch and delivery cycle." He has previously stated that the growth of Chinese EV makers represents a "significant opportunity" to disrupt the high-end and luxury automotive segment. NIO's strategy focuses not just on higher volumes but on improving product mix and strengthening its premium brand positioning.
CFO Stanley Yu Qu noted that the company will "further enhance cost and operational efficiency" after reporting an adjusted net profit of 43.5 million yuan for the first quarter, though it still posted a net loss under standard accounting.
Competitive pressures remain high. BYD's Denza premium line has enlisted British actor Daniel Craig for its global campaign, while the ES9 is often compared to premium SUVs like Li Auto's L9. NIO differentiates itself with battery-swapping technology, offering customers a new battery in minutes rather than waiting at charging stations.
The stock's rally on Wednesday stood in contrast to declines in shares of Li Auto and XPeng, suggesting investors are specifically betting on NIO's model launch and delivery prospects rather than making a sector-wide bet on Chinese EV stocks. However, risks remain. If ES9 orders fail to translate into steady deliveries, or if the ongoing price war in China forces deeper discounts, the stock could give back its recent gains. Additionally, battery swapping remains unproven outside China, where infrastructure and consumer habits differ.
For now, the market has given NIO a positive nod. The focus now shifts to whether the ES9, along with the upcoming ONVO models, can help the company achieve its Q2 targets without eroding the margin improvements that distinguished this earnings report from earlier recoveries.
