Should You Buy Nio While It's Below $7?

Core Viewpoint - Nio's revenue is increasing significantly, with a 92.6% year-over-year growth in October vehicle deliveries, but the stock price has recently declined, raising questions about its future performance and profitability [1][4][12]. Group 1: Financial Performance - Nio's current stock price is $6.63, with a market capitalization of $13 billion, and a gross margin of 10.28% [2]. - The company has experienced a 300% revenue increase over the past five years, yet it has never turned a profit, with net losses widening from $1.6 billion in 2022 to $3 billion in 2024 [9][10]. - There are indications of improvement, as Nio's net losses have decreased sequentially each quarter in 2025, and the company aims to achieve its first profitable quarter in Q4 of this year [12]. Group 2: Market Expansion - Nio's primary revenue source is the Chinese market, where it has seen significant growth, but it is also expanding into Europe and other international markets [4][5]. - The company has entered several European markets since 2021, including Norway, Sweden, Denmark, Germany, and the Netherlands, and plans to expand further [5]. - However, European sales have declined, with estimated sales dropping from approximately 2,365 vehicles in 2023 to just 833 so far this year [6]. Group 3: Competitive Landscape - Nio faces challenges in the European market, including software validation costs and tariffs on Chinese EVs, which impact its low-cost vehicle strategy [7][8]. - The company is attempting to replicate the success of competitors like Tesla, which also faced initial losses before achieving profitability [11].