ZACKSยท2025-06-17 17:00Core Insights - NIO Inc. reported a gross margin of 7.6% in Q1 2025, an increase from 4.9% in the same period last year, driven by higher sales in high-margin segments and improved vehicle margins [1][9] - The company expects vehicle margins to reach approximately 15% in Q2 2025, supported by new models with enhanced profitability [2][9] - NIO anticipates a vehicle gross margin above 20% in Q4 2025, with projected monthly deliveries of around 25,000 units for the new ES8 model [4][9] Financial Performance - NIO's vehicle margin rose to 10.2% in Q1 2025 from 9.2% a year earlier, attributed to lower material costs per unit [1] - Competitor Li Auto reported a gross margin of 20.5% in Q1 2025, while XPeng achieved a gross margin of 15.6%, indicating competitive pressure in the market [5][6] Future Projections - The company expects accelerated growth in Q3 2025 due to robust deliveries and improved supply chain efficiencies [3] - NIO's vehicle gross margin is projected to exceed 20% in Q4 2025, reflecting rising sales and operational efficiencies [4][9] Valuation and Market Position - NIO's shares have underperformed the Zacks Automotive - Foreign industry, declining 19.5% year-to-date compared to the industry's 5.8% decline [7] - The company appears undervalued with a forward sales multiple of 0.44, slightly lower than the industry's 0.46 [11]