Core Insights - NIO Inc. is facing a lawsuit from Singapore's GIC over alleged accounting irregularities related to battery sales recognition [1][2] - The lawsuit claims that NIO misled investors and inflated its share price, with GIC arguing that its affiliate Weineng should be treated as a variable interest entity [2][3] Delivery Momentum and Product Expansion - NIO achieved a record delivery of 87,071 vehicles in Q3 2025, a 40.8% increase year-over-year, aligning with its guidance of 87,000-91,000 units [4] - The launch of the ONVO L90 contributed significantly to this growth, while the All-New ES8 is expected to enhance NIO's position in the premium SUV market [6] Competitive Landscape - In comparison, XPeng delivered 116,007 units in Q3, up 149% year-over-year, while Li Auto reported 93,211 deliveries, down from 152,831 units in the same period last year [5] Battery Swap Technology and Infrastructure Advantage - NIO operates over 3,500 battery swap stations globally, completing over 84 million swaps, which enhances customer convenience and strengthens its brand [7] Margins Expected to Improve - NIO anticipates improved vehicle margins in Q3, targeting approximately 20% gross margins for the L90 and ES8 models, supported by in-house technology [8] Price Performance & Valuation - Year-to-date, NIO shares have increased by 56%, outperforming the industry, while XPeng shares rose by 81% and Li Auto shares declined by 8.3% [9][10] - NIO is currently trading at a forward sales multiple of 0.77, lower than Li Auto and XPeng but higher than the industry average [12] Revenue Estimates - The Zacks Consensus Estimate projects NIO's revenues to grow by 49% in 2025 and 45% in 2026, with bottom-line estimates showing improvements of 32% and 71% for the current and next year, respectively [13]

Industry Overview - China's new-energy vehicle (NEV) market, including battery electric vehicles (BEVs) and plug-in hybrids (PHEVs), saw over 11 million units sold in 2024, a 40.7% increase from 2023. In Q1 2025, sales of passenger NEVs were estimated at 2.86 million units, up 43% year-over-year [1][2]. Company Comparison: Li Auto vs. NIO Product Lineup & Upcoming Offerings - Li Auto has established a strong reputation with its extended-range electric vehicles (EREVs) and plans to launch additional BEVs, including models Li i8, i6, i7, and i9 within the next 12-18 months [3]. - NIO focuses solely on pure EV models, with a diverse lineup and plans for new launches, including the NIO 89 and additional models under its ONVO and Firefly brands [4][5]. Deliveries - Li Auto delivered 500,508 vehicles in 2024, a 33% increase from 2023, and 92,864 units in Q1 2025, up 15.5% year-over-year, with cumulative deliveries reaching 1,226,736 units as of March 31, 2025 [6]. - NIO delivered 221,970 vehicles in 2024, a 30.7% increase, and 42,094 units in Q1 2025, up 40.1% year-over-year, with cumulative deliveries totaling 713,658 units [7]. Revenues, Margins & Bottom Line - Li Auto reported total revenues of $19.8 billion in 2024, a 16.6% increase, with an operating profit of $961 million and a net income of $1.5 billion [8]. - NIO generated over $9 billion in revenues in 2024, an 18.2% increase, but incurred an operating loss of $3 billion and a net loss exceeding $3 billion [9][10]. Balance Sheet - Li Auto has a strong balance sheet with $9 billion in cash and manageable long-term debt of $1.1 billion, allowing for significant investments in R&D and expansion [12]. - NIO holds $2.6 billion in cash with $1.56 billion in long-term borrowings, indicating a higher leverage risk [13]. Retail and Global Expansion - Li Auto operates 502 retail stores and 478 service centers in China, with plans to expand its supercharging stations to 4,000 by the end of 2025 [15]. - NIO has a significant retail presence with 180 NIO Houses and aims to enter 25 countries by the end of 2025 [16]. Technology & Innovation - NIO is advancing its battery swap technology, having deployed over 3,200 power swap stations and partnering with CATL to build a large battery swap network [17]. - Li Auto is focusing on autonomous driving technology, rolling out advanced driver assistance systems and aiming to develop humanoid robots after achieving level-4 autonomous driving capabilities [18][19]. Stock Performance and Valuation - Li Auto has shown better stock performance in 2025 and holds a Value Score of B, while NIO has a Value Score of D, indicating Li Auto's stronger fundamentals [20][21]. Conclusion - Li Auto currently leads in vehicle deliveries, profitability, margins, financial health, and self-driving capabilities, positioning it as a more favorable investment compared to NIO, which faces challenges with high losses and a leveraged balance sheet [26][27].