NIO Inc. saw its shares climb 7.23% to close at $5.04 on Friday, driven by a preliminary earnings alert that signaled a potential milestone. The Chinese electric vehicle manufacturer forecast an unaudited adjusted operating profit between 700 million and 1.2 billion yuan for the fourth quarter of 2025.
Trading activity surged, with volume reaching approximately 90.8 million shares—close to twice the stock's 50-day average. Despite the rally, the stock remains down roughly 37% from its 52-week high of $8.02 reached last October.
Profit Alert Marks Potential Turning Point
The projected profit represents what would be NIO's first quarterly adjusted operating profit, a significant development for a company that has invested heavily to compete with Tesla and domestic rivals. Under U.S. GAAP, the company expects operating profit in a range of 200 million to 700 million yuan.
"More meaningful share price recovery would likely await broader EV demand recovery in China," noted Morgan Stanley automotive analyst Tim Hsiao, highlighting the challenging competitive landscape. The Chinese EV sector continues to face intense rivalry and ongoing price pressures.
Strategic Milestones and Challenges
Separately, NIO announced it had completed its 100 millionth battery swap, underscoring the continued expansion of its signature battery-swap network. This infrastructure remains central to the company's strategy, though investors have frequently questioned the substantial costs associated with building and maintaining the service.
Trade dynamics also present a broader consideration. China's EV exports surged to $69.6 billion in 2025, fueling trade tensions in Europe and North America that could impact pricing and overseas expansion strategies for automakers like NIO.
Investors are now focused on the company's full earnings release scheduled for March 19. The report is expected to provide crucial details on profit confirmation, margin trends, cash flow, and spending levels, offering clearer insight into whether this quarter represents a sustainable turnaround or a temporary improvement.