Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [4]. Core Views - The company's revenue for Q1 2025 showed a year-on-year increase of 21.5% but a quarter-on-quarter decrease of 38.9%, totaling 12.04 billion RMB. The gross margin decreased by 4.1 percentage points quarter-on-quarter to 7.6% [1]. - The management expects Q2 2025 delivery volumes to be around 72,000 to 75,000 units, with potential recovery in gross margins starting from June 2025 as new models are delivered [2]. - The company is focusing on multiple strategies to improve its fundamentals, including cost reduction, enhancing sales channels, and launching new models equipped with self-developed chips [3]. Summary by Sections Financial Performance - Q1 2025 total revenue was 12.04 billion RMB, with a gross margin of 7.6%. Non-GAAP net loss was 6.28 billion RMB, which is a year-on-year increase of 28.2% [1]. - The automotive business revenue for Q1 2025 was 9.94 billion RMB, with a gross margin of 10.2% [2]. Cost Management - R&D expense ratio decreased by 2.6 percentage points year-on-year to 24.2%, while SG&A expenses increased by 5.4 percentage points year-on-year to 35.0% [2]. - The company is implementing various cost-cutting measures, which are expected to gradually reflect in financial results [3]. Future Outlook - The management anticipates a recovery in gross margins starting from June 2025, driven by the delivery of new models [2]. - The company aims to achieve a monthly sales volume of 25,000 units for both NIO and the new brand by Q4 2025 [3]. Valuation and Estimates - The report adjusts the Non-GAAP net loss estimates for 2025 to 17.2 billion RMB, down from a previous estimate of 17.8 billion RMB [4]. - Revenue projections for 2025 are set at 84.64 billion RMB, with a growth rate of 28.8% [5].

Core Viewpoint - NIO's CEO Li Bin expressed confidence that the company has reached its lowest point in Q1 and expects to enter a growth phase starting in Q2 [1][2] Financial Performance - In Q1, NIO delivered 42,000 vehicles, a year-on-year increase of 4.1%, with an average vehicle price of 286,000 CNY [1] - NIO reported a net loss of over 6.7 billion CNY in Q1, with cash reserves decreasing from 41.9 billion CNY in Q4 of the previous year to 26 billion CNY [2] - NIO's Q2 delivery guidance is set between 72,000 and 75,000 vehicles, representing a year-on-year growth of 25%-37% [2] Sales Strategy - NIO aims for a monthly sales target of 50,000 vehicles by Q4, with expectations of significant contributions from its brands NIO and Lada [6][10] - The company plans to enhance its sales strategy through a combination of "territorial warfare" (opening new stores) and "guerrilla warfare" (leveraging battery swap stations for vehicle demonstrations) [9] Product Development - NIO's four main models (ET5, ET5T, ES6, EC6) are expected to boost sales and improve gross margins, with ES6 projected to exceed a 20% gross margin [6][12] - The new generation ES8 is anticipated to be more competitive in the global market, with a focus on design and space [13] Cost Management - NIO plans to reduce R&D expenses from over 3 billion CNY per quarter to between 2-2.5 billion CNY by eliminating low ROI projects [14] - The company emphasizes controlling costs and improving operational efficiency as key components to achieving profitability [12][16] Market Competition - NIO faces intense competition from peers like Xiaomi, Li Auto, and Xpeng, all of which are also targeting profitability in the near future [8][11] - The competitive landscape is expected to become more challenging with the upcoming launches of new electric models from competitors [11]