Core Viewpoint - Nio is considered an undervalued growth stock despite its disappointing performance over the past few years, with a current stock price of approximately $5 compared to its IPO price of $6.26 and a peak price of $62.84 in February 2021 [1][2]. Group 1: Business Expansion - Nio is expanding its battery-swapping network, which differentiates its vehicles from competitors and enhances customer loyalty. As of June, Nio operated 3,445 power swap stations, a significant increase from 777 stations at the end of 2021 [5][6]. - The company is collaborating with major investors, including CATL, to fund the growth of its battery-swapping network, which is expected to generate higher-margin recurring revenues through its "battery as a service" (BaaS) model [6]. Group 2: Delivery Growth - Nio's annual deliveries rose by 39% in 2024, reaching 221,970 vehicles, driven by strong sales of its ET series sedans and Onvo SUVs, as well as expansion into Europe [8][9]. - In Q1 2025, deliveries increased by 40% year over year to 42,094 vehicles, with total deliveries in the first half of 2025 rising nearly 31% to 114,150 vehicles, indicating continued growth potential in both China and Europe [9]. Group 3: Financial Performance - Nio's vehicle margin improved from 9.5% in 2023 to 12.3% in 2024, as the company sold a higher mix of premium sedans and streamlined production costs [11][12]. - Analysts project Nio's revenue to rise by 37% to 90.2 billion yuan ($12.6 billion) in 2025, with a compound annual growth rate (CAGR) of 26% expected from 2024 to 2027, reaching 132.7 billion yuan ($18.5 billion) [10]. Group 4: Valuation - Nio's current valuation is significantly lower than its growth potential, trading at an enterprise value of 67.9 billion yuan ($9.5 billion) and just 0.8 times this year's sales, compared to Tesla's 10.9 times [13].

Core Viewpoint - Nio, a leading Chinese electric vehicle manufacturer, has experienced significant stock price fluctuations, with its shares dropping from a peak of $62.84 in February 2021 to below $4 currently, raising questions about its investment potential amid challenges and opportunities [1][2]. Group 1: Reasons to Buy Nio's Stock - Nio's deliveries have shown signs of recovery, with a 39% increase in 2024 to 221,970 vehicles and a 44.5% year-over-year increase in the first four months of 2025 [5][6]. - The company's vehicle margins improved from 9.5% in 2023 to 12.1% in 2024, driven by reduced material costs and a focus on higher-margin vehicles [8][9]. - Analysts project a compound annual growth rate of 28% in revenue from 2024 to 2027, alongside a significant reduction in net losses, making the stock attractive at less than 1 times next year's sales [10]. Group 2: Reasons to Sell Nio's Stock - Nio faces intense competition from larger players like BYD and Tesla, which delivered 4.27 million and 657,102 vehicles respectively in 2024, limiting Nio's market share growth [12]. - The company continues to incur substantial losses and is expected to remain unprofitable in the near future, complicating its business sustainability [13]. - Nio's debt-to-equity ratio has surged from 2.4 in 2021 to 15.8 in 2024, raising concerns about its financial stability and ability to fund expansion plans [14]. Group 3: Overall Assessment - Despite facing significant challenges, Nio's accelerating deliveries, improving margins, and low valuation suggest potential for future growth, making the bull case more compelling than the bear case [15][16].