William Li Says NIO’s Worst Is Over—But Is It Too Early to Tell?

Has NIO Truly Passed Its Lowest Point? Recently, NIO’s founder and CEO, William Li (Li Bin), asserted that the company “believes that the lowest point has already passed in the first quarter of this year” , expressing confidence that NIO will return to an upward trajectory thereafter. This bold claim comes on the heels of a turbulent period for the Chinese EV maker. NIO faced steep losses and slumping sales in 2023, followed by a mix of record highs and sharp dips in vehicle deliveries through 2024 and early 2025. Given the intense competition in both China and international EV markets, Li’s optimism warrants scrutiny. Is NIO truly on the rebound, or is this confidence premature? We examine this through two lenses: NIO’s latest sales trends and its competitive position against rivals like Li Auto, Xpeng, BYD, and Tesla.

Recent Sales Performance: Rebound or Temporary Relief?

NIO’s delivery figures tell a story of partial recovery with lingering volatility. In 2023, the company’s sales hit a nadir in the second quarter – June 2023 saw only 6,155 vehicles delivered, marking NIO’s lowest monthly volume in years . This slump coincided with NIO’s transition to a new product lineup: the company launched six new or upgraded models in 2023 (switching all major models to its second-generation platform) . The rollout included the new ES6 and ES8 SUVs, the ET5T wagon, and the flagship ET9 sedan, among others. This ambitious overhaul strained NIO’s finances and temporarily hurt sales as older models were phased out before new models could ramp up. As a result, NIO ended 2023 with 160,000 vehicles sold and a massive net loss of RMB 21.1 billion (approx. $3 billion), a 45% wider loss than the prior year . Clearly, 2023 was a painful year, though arguably not as dire as the 2019 crisis when NIO needed a government bailout.

Encouragingly, sales rebounded in late 2023 and into 2024. With the new models gaining traction, NIO’s deliveries climbed again. The company delivered 221,970 vehicles in full-year 2024, a 38.7% jump from 2023 . Notably, NIO achieved its first-ever five-figure monthly sales in late 2024 – delivering 31,138 vehicles in Dec 2024, a record high (72.9% higher than Dec 2023) . This surge was powered in part by NIO’s new sub-brand “Onvo”, a more affordable, family-oriented EV line. Onvo’s first model (the L60 SUV launched in September 2024) contributed over 10,500 units in December , roughly one-third of NIO’s monthly total, while the premium NIO-branded models made up the rest. By year-end 2024, NIO’s main premium brand was growing modestly (+25.7% YoY in 2024), but the addition of Onvo’s 20,761 units for the year helped boost overall volume significantly .

However, the claim of being past the “lowest point” is not entirely confirmed by recent quarter-to-quarter trends. In fact, after the Q4 2024 peak, NIO’s deliveries dropped dramatically in Q1 2025, reflecting seasonal weakness and the uneven nature of its recovery. NIO delivered 42,094 vehicles in Q1 2025, which was 40% higher than the depressed Q1 2024 (30,053 units) but 42% lower than the bumper 72,689 units in Q4 2024 . This sequential plunge underscores that NIO’s momentum remains shaky. Much of the growth is year-end loaded – likely boosted by incentives and a backlog of new model orders – whereas the start of 2025 saw demand pull back again. Even Li Bin admitted internal issues kept NIO from meeting operational goals in 2022–2024 . The core NIO brand’s sales have stagnated: in March 2025, NIO’s premium models delivered just 10,219 units, down ~14% year-on-year (as March 2024 benefited from the then-new ET5 sedan). It was only thanks to 4,820 Onvo deliveries that NIO’s overall March 2025 volume showed a YoY increase . This suggests that NIO’s original high-end lineup is still struggling to grow in the face of competition, and the company is leaning on new segments (and lower-priced models) to bolster its numbers.

To NIO’s credit, the company has been aggressively expanding its offerings and improving margins from the worst levels of the downturn. After plunging into single digits (even negative territory) in mid-2023, vehicle gross margin recovered to 11.9% in Q4 2023 – a respectable figure among Chinese EV startups (many of which had low or negative margins). NIO achieved this without resorting to broad price cuts, preserving a premium pricing strategy even as a price war raged in China’s EV market in early 2023. Instead, NIO focused on cost control and efficiency: Li Bin implemented a 10% workforce reduction (3,000 layoffs) and shelved certain non-core projects, saving about RMB 2 billion in costs , while simultaneously hiring thousands of sales staff to boost deliveries . These moves helped stabilize NIO’s finances – the company’s cash on hand swelled to a robust **RMB 57.3 billion ($8 billion) by Q4 2023** after securing strategic investments (including over $1 billion from a Middle East fund). With this cash, NIO insists it can ride out the storm and continue heavy R&D spending (over RMB 10 billion per year) on new technology and models.

Looking ahead, NIO’s management is banking on a strong rebound from Q2 2025 onward, fueled by its refreshed product lineup. The company has issued an upbeat guidance for Q2 2025 deliveries at 72,000–75,000 vehicles, which would be an astonishing ~75% jump quarter-on-quarter and ~30% year-on-year . This implies NIO expects monthly sales to average 24k–25k in Q2 – back to record levels. The optimism comes from multiple new launches: deliveries of the flagship ET9 sedan (an electric executive sedan starting around ¥788,000) began in March 2025 , and NIO’s third brand (code-named “Firefly” for a compact EV aimed at Europe and lower-tier cities) is set to debut its first model in mid-2025 . Additionally, the Onvo sub-brand plans two new SUV models in 2025 to target Li Auto’s popular family SUVs . These expansions could significantly boost volume – but also carry execution risks. Ramping up multiple new models and brands simultaneously is costly and complex. It remains to be seen if consumer demand will match NIO’s production ambitions, especially as competition intensifies.

Competitive Landscape: Fierce Battles on All Fronts

NIO’s claim of having weathered the worst must be measured against the competitive environment, which in China’s EV market is nothing short of cutthroat. In recent years, several key rivals have surged ahead or eroded NIO’s early lead in various segments. We evaluate NIO’s position against major competitors on sales, product offerings, and technology – both in the domestic Chinese market and abroad.

Sales Volume and Market Share. In terms of sheer sales, NIO has fallen behind its closest Chinese EV startup peers and is dwarfed by the industry giants. Arch-rival Li Auto has firmly overtaken NIO in the premium segment. Li Auto delivered 500,508 vehicles in 2024, more than double NIO’s volume, after growing ~33% from 2023’s 376,000 units . Unlike NIO’s volatile sales pattern, Li Auto’s growth has been consistently robust, with monthly deliveries frequently in the 25k–30k range by late 2024. In fact, Li Auto’s December 2024 sales neared 60,000 (in a single month) as it pushed toward its half-million annual tally . Li Auto’s focus on extended-range electric SUVs (which cater to family buyers with range anxiety) has proven a winning formula. By contrast, NIO’s highest monthly result to date – ~31k in Dec 2024 – included its new mid-range sub-brand contributions. In the pure premium EV space, NIO’s volumes per model are still relatively modest. For example, its best-selling model historically was the ES6 SUV; the newly introduced second-generation ES6 helped revive sales in mid-2024, but each NIO model typically sells only a few thousand units per month, whereas Li Auto’s Li L7 and L8 SUVs routinely each top 10,000 units monthly soon after launch.

Another compatriot, Xpeng Motors, also staged a comeback in late 2024. Xpeng’s sales had languished in early 2023 (leading to a major strategic overhaul), but the launch of its G6 SUV and a technology cooperation with Volkswagen gave it new momentum. In 2024, Xpeng delivered 190,068 vehicles, a 34% YoY leap , nearly closing the gap with NIO’s total. By December 2024, Xpeng hit a record 36,900 deliveries in one month thanks to strong G6 demand and the rollout of its new P7i sports sedan. While NIO still exceeded Xpeng in annual volume for 2024, the resurgence of Xpeng demonstrates how dynamic the market is – and how NIO faces threats from all sides, including from earlier strugglers turning things around.

The incumbent giant BYD presents the most daunting challenge in terms of scale. BYD’s dominion over China’s new energy vehicle market grew even larger: it sold an astonishing 4.27 million NEVs in 2024, a 41% increase YoY . This includes over 1.76 million pure electric vehicles and 2.49 million plug-in hybrids, spanning price points from budget minicars to luxury models. While many of BYD’s sales are in lower segments that NIO doesn’t target, BYD is increasingly encroaching on the premium space. Its Denza sub-brand (a premium marque co-developed with Mercedes-Benz) sold ~126,000 high-end EVs in 2024 , on par with NIO’s volume. Denza’s SUV and MPV models (priced ¥300k–¥500k) have seen solid acceptance, proving that BYD can move upmarket. Moreover, BYD’s upcoming “Yangwang” ultra-luxury EVs (like the ¥1 million U8 off-road SUV) and its high-performance F-brand indicate an ambition to compete even at the top end. NIO’s core proposition as a premium EV maker with superior service is under pressure as BYD leverages its massive scale to deliver value and technology (e.g. BYD’s in-house Blade batteries and hybrid tech) at aggressive prices. BYD’s volume also gives it a cost advantage that NIO lacks, allowing it to weather price wars and still remain profitable.

Internationally, Tesla remains the benchmark and a fierce competitor in China’s premium EV segment. Tesla’s China sales hit a record 657,000 units in 2024 (up 8.8% from 2023) , making it the best-selling luxury EV brand in China by far. The Tesla Model Y crossover, in particular, has been a smash hit – it was not only the top-selling electric SUV, but one of the top-selling passenger cars in China overall. Priced from ~¥263,000 (after multiple price cuts) , the Model Y significantly undercuts NIO’s SUVs while offering strong performance and brand cachet. Tesla’s aggressive price reductions in early 2023 sparked a price war that forced many EV makers to respond; NIO resisted outright slashing prices, a decision which preserved its margins but likely constrained its sales growth as some price-sensitive consumers flocked to Tesla or BYD. As Tesla continues to expand production and cut costs (its Shanghai Gigafactory now churns out over 800k cars per year ), NIO faces an uphill battle to win over customers who might be weighing a NIO ET5/ES6 against a cheaper Tesla Model 3/Y with similar range and performance. In technology, Tesla also leads in areas like efficient powertrain and automated driving software (though NIO has its own NIO Pilot/NAD system, Tesla’s Autopilot and FSD are strong draws for tech-savvy buyers).

Beyond these major players, the competitive field is crowded. Other Chinese EV startups and tech giants add to the pressure. Zeekr (Geely’s premium EV brand) sold over 70,000 EVs in 2024 and is targeting 140,000 in 2025, with new models that overlap with NIO’s sedan and SUV segments. Huawei-backed AITO and Luxeed EVs are trying to lure high-end buyers with Huawei’s tech ecosystem. Even foreign luxury brands like BMW, Mercedes, and Audi are electrifying their fleets in China – and unlike a few years ago, they now have locally made EV models (e.g. BMW i3 sedan, Mercedes EQE SUV) that compete in NIO’s price range. In short, NIO is squeezed between domestic rivals who are scaling up fast and established luxury marques pivoting to EVs with their brand legacy.

The competition is not just about sales volumes; it’s also about technology and product strategy, areas where NIO must prove its edge to justify Li’s optimism.

• Product Mix and Innovation: NIO has prided itself on being a pioneer – it introduced features like battery swapping, a unique subscription-based battery service (BaaS), and a strong user community culture. These remain differentiators: NIO’s network of over 1,300 battery swap stations in China (as of late 2024) offers convenience that Tesla’s Superchargers or others’ charging networks don’t match in the same way. However, the merits of battery swapping are debated; it’s capital-intensive, and rivals have largely stuck to fast-charging and larger battery packs. NIO’s expanding lineup now covers sedans, SUVs, coupes, and soon MPVs and smaller cars via sub-brands – a broader portfolio than Li Auto (which so far sells only SUVs). This could attract more segments of customers, but also poses challenges in marketing and service. Notably, NIO’s ET5 sedan (launched late 2022) was aimed at the entry luxury segment and initially boosted sales, yet its momentum slowed as competitors (Tesla Model 3 refresh, Xpeng P7i, BYD Seal) wooed the same customers at lower prices. Meanwhile, Li Auto’s focused three-SUV lineup captured the family SUV niche decisively. NIO is responding by pushing into Li Auto’s turf – in 2025, the Onvo brand will launch a 6–7 seater SUV and a large 5-seater SUV to compete directly with Li Auto’s Li L9/L8/L7 series . This is essentially NIO conceding that it needs a more mass-market, value-oriented product line (Onvo) to win volume, instead of relying purely on the high-end niche. It’s a sensible strategy, but success is not guaranteed: Xpeng tried a lower-cost sub-brand (“Mona” platform) strategy as well, and it remains to be seen if NIO can manage the brand positioning without cannibalizing its premium image.

• Profitability and Spending: A key competitive metric is that Li Auto has become profitable, while NIO is still far from it. Li Auto enjoyed a healthy 20.5% gross margin in 2024 (even after some decline from 2023), thanks to relatively higher selling prices and efficient cost control on its range-extended EVs. NIO’s vehicle