Nio Inc (NYSE: NIO) is expected to sustain its non-GAAP profitability in the second quarter, primarily driven by the strong delivery performance of its high-margin SUV (sport utility vehicle) models.
A team of Deutsche Bank analysts led by Wang Bin forecast in a research note on Monday that the Chinese EV maker could report a non-GAAP net profit of about 180 million yuan ($26.5 million) in the second quarter.
This figure represents a 304% quarter-on-quarter increase, with stable gross margins serving as the key support for this profit projection.
Deutsche Bank believes Nio’s second-quarter vehicle margin guidance of 17% to 18% is achievable, largely thanks to the high-margin ES8 and ES9 SUV models accounting for a higher proportion of total sales volume.
Furthermore, stable marketing and promotional programs for most products have also alleviated some cost pressures, the team noted.
The market performance of the new flagship SUV ES9 has been particularly outstanding. Nio executives announced last week that the company will deliver its 10,000th ES9 in June.
This exceeded broad market expectations, Deutsche Bank said. The team pointed out that this announcement implies Nio could deliver at least 7,000 ES9s in June, surpassing the bank’s previous assumption of 6,000 units.
Based on this strong momentum, Deutsche Bank revised its full-year 2026 delivery estimate for the ES9 upwards to 56,000 units.
The upward revision in delivery estimates also pushed up overall financial forecasts. Deutsche Bank raised its 2026 total volume assumption for Nio to 450,000 units, representing a 38% year-on-year increase.
Consequently, the analysts revised down Nio’s 2026 reported loss forecast by 35.4% and raised the target price to HK$86.00 from the previous HK$84.50.
Behind the robust delivery data is a massive order backlog. The research note estimates that Nio’s total new order intake in May climbed to about 84,000 units, doubling month-on-month.
The surge in new orders is primarily linked to the launch of the new SUVs. Deutsche Bank estimates that the ES9 has already secured over 25,000 non-cancellable orders, resulting in long wait times for delivery.
The wait time for the low-end version of the ES9 is 8 to 9 weeks, while the high-end versions equipped with advanced suspension systems currently face wait times as long as 16 to 17 weeks, Deutsche Bank noted.
As Nio accelerates deliveries, competition in China’s large SUV market is heating up sharply.
The rivalry between Nio and local competitor Li Auto (NASDAQ: LI) is becoming increasingly public, with both companies striving to defend and expand their shares in the premium market.
Last Friday, Nio’s vice president of branding and communications, Ma Lin, publicly questioned a chassis comparison test video released on Li Auto’s official platform via the social media platform Weibo. The video compared the suspension performance of the Li L9 and the Nio ES9.
Ma urged Li Auto to verify the authenticity of the video and clarify the environmental settings during the test.
In addition to the strong performance of the ES9, Nio’s other large SUV, the ES8, has also maintained its sales momentum.
Nio co-founder and president Qin Lihong said that the all-new ES8 is expected to complete its 120,000th vehicle delivery within this month.
The model delivered 11,475 units in May, surpassing the 10,000-unit mark for the seventh consecutive month.
Nio already showed signs of a financial turnaround in the first quarter. The company achieved an adjusted operating profit of 66.8 million yuan in the first quarter.
This marked its second consecutive quarter of maintaining a non-GAAP profitability trend. The overall gross margin in the first quarter also expanded significantly to 19.0%.
Sales momentum continued to accelerate in the second quarter. Nio delivered 37,705 vehicles in May. This set the company’s highest single-month delivery record so far this year.
Looking ahead, Nio expects its total deliveries in the second quarter to be between 110,000 and 115,000 units.
Based on the delivery volumes of the past two months, its deliveries in June are expected to range from 43,000 to 48,000 units.
($1 = 6.7840 yuan)
