To The Moon

As we approach $NIO Inc.(NIO)$ Fiscal Q3 2025 earnings release, scheduled for Tuesday, November 25, 2025 (Before Market), the setup is defined by a "volume vs. margin" narrative.

Nio is currently in a pivotal transition phase. The company has successfully moved from a single premium brand to a multi-brand conglomerate (Nio, Onvo, Firefly). While top-line delivery numbers are hitting record highs (breaking 40k units in October 2025), the market's anxiety has shifted from "demand" to "profitability." Can Nio maintain healthy margins while selling cheaper Onvo and Firefly models?

Consensus vs. Whispers

Consensus Revenue Estimate: ~RMB 22.3 Billion ($3.1B).

Consensus EPS: -RMB 1.70 (-$0.24).

Implied Move: Options pricing suggests a ±8–10% swing post-earnings.

The Setup: Nio has beaten delivery expectations recently, with September reaching ~34.7k and October shattering records at ~40.4k. This delivery strength is likely priced in. The surprise factor will come from margins and Q4 guidance.

Summary: Nio Q2 2025 Earnings Recap

Context: Released September 2, 2025

Nio’s Fiscal Q2 2025 was a classic "good news, bad news" event. While the company proved it could scale volume aggressively with its new sub-brands (Onvo and Firefly), the financials revealed the heavy cost of that expansion. The stock initially dipped as investors digested the reality that selling more cars doesn't immediately translate to losing less money.

The Scorecard: Q2 2025 Actuals

Key Operational Highlights:

Multi-Brand Reality: For the first time, Nio reported meaningful volume from its sub-brands.

Nio Brand: ~47,100 units

Onvo (Family Mass Market): ~17,100 units

Firefly (Entry/EU focused): ~7,800 units

Margin Compression: Vehicle margins fell to 10.3% (down from 12.2% a year ago). This confirmed the market's fear: selling cheaper Onvo/Firefly cars lowers the Average Selling Price (ASP) faster than production efficiency lowers costs.

The Guidance Given (The "Lesson")

During the Q2 call, management provided aggressive guidance for Q3 and the remainder of 2025.

Q3 Delivery Guidance: 87,000 – 91,000 units.

Implication: This would be a new quarterly record, driven by the Onvo L60 and L90 ramp-up.

Q3 Revenue Guidance: RMB 21.8B – 22.9B.

The "Breakeven" Promise: CEO William Li explicitly targeted monthly deliveries of 50,000 in Q4 and reiterated a goal to reach non-GAAP breakeven in Q4 2025.

Lessons Learned for Investors

The Q2 report and subsequent guidance offered three critical lessons that directly apply to the upcoming Q3 earnings:

Lesson A: Volume is Vanity, Margin is Sanity

The biggest takeaway from Q2 was that record deliveries do not guarantee stock appreciation. Nio delivered 72k cars but still missed revenue estimates because the mix shifted toward cheaper cars.

Application for Q3: Do not just look at the headline delivery number (which we know is ~40k for Oct alone). Look at the Revenue per Vehicle. If this drops too steeply, the stock will sell off even on a delivery beat.

Lesson B: The "Transition Pain" is Real

Management blamed the low 10.3% margin on the "product transition period."

The Lesson: Investors learned that Nio's manufacturing efficiency is still lagging its product launches. The Onvo brand is currently a drag on margins, not a booster. Until Nio proves it can make a 15% margin on an Onvo L60, the "economies of scale" argument is theoretical, not factual.

Lesson C: Watch the "Supply Chain" Excuse

In Q2, management cited battery supply constraints as the reason they couldn't deliver even more Onvo units.

The Lesson: Demand is not the problem; execution is. For the upcoming Q3 earnings, if they miss the 87k-91k target or guide weak for Q4, watch closely if they blame supply chains again. If they do, it signals a structural bottleneck that caps their upside.

Q2 2025 taught us that Nio has successfully transformed into a mass-market automaker (via Onvo), but it hasn't figured out how to do so profitably yet. The guidance given for Q3 was incredibly high (nearly 90k units), setting a very high bar for the upcoming report.

Key Metrics to Watch

Vehicle Margin (The "Blended" Risk)

This is the single most critical metric.

The Fear: With the mass-market Onvo L60 and L90 now comprising a massive chunk of volume (Onvo delivered ~17k units in Oct), the Average Selling Price (ASP) is dropping. Investors fear vehicle margins could slip below the targeted 15% range due to this cheaper product mix.

The Bull Case: If Nio demonstrates that economies of scale from the L60/L90 and the new Firefly models (active as of late 2024) are reducing unit costs faster than ASP degradation, the stock will soar.

Target: Watch for a blended vehicle margin above 13.5%. Anything below 12% will be punished severely.

Q4 2025 Delivery Guidance

Management's tone for the rest of the year is crucial.

Context: October deliveries were ~40k.

Expectation: The market wants to see guidance for Q4 total deliveries in the 115,000 – 125,000 range. If they guide for >40k monthly average for Nov/Dec, it confirms the "supercycle" growth narrative.

Cash Burn & Liquidity

Running three brands (Nio, Onvo, Firefly) is capital intensive.

Watch: Cash reserves relative to operating loss. The market needs assurance that the Firefly ramp-up (aimed at the EU market) isn't draining cash too fast before it becomes profitable.

Metric: Free Cash Flow (FCF). Is it narrowing towards neutral?

ONVO & Firefly Order Backlog

Look for commentary on the Onvo L60 and Firefly order book. Are these orders sticky, or are cancellation rates rising due to competition from Xiaomi or Xpeng?

Nio (NIO) Price Target

Based on 22 analysts from Tiger Brokers app offering 12 month price targets for Nio in the last 3 months. The average price target is $6.83 with a high forecast of $9.00 and a low forecast of $3.00. The average price target represents a 26.43% change from the last price of $5.40.

Trading Opportunity: Short-Term Post-Earnings

Given the record delivery prints leading into this, the "sell the news" risk is real if financial metrics don't match the operational hype.

Scenario A: The "Profitless Growth" (Bearish)

Triggers: Revenue beats, but Vehicle Margins miss (<12%) and Net Loss widens.

Reaction: The stock likely dumps. The market hates "selling dollars for 90 cents," even at high volume.

Trade: If pre-market is red on margin misses, look for a continuation flush at the open.

Scenario B: The "Scale Efficiency" (Bullish)

Triggers: Margins hold steady (>13%) despite lower ASPs, and Guidance suggests 120k+ deliveries for Q4.

Reaction: This proves the multi-brand strategy works. The stock could squeeze shorts aggressively, as Nio has historically had high short interest.

Trade: Buy call spreads (Dec expiry) targeting the $6.50–$7.50 range (adjust based on current spot price).

Technical Note (Nov 21, 2025):

If the stock has run up significantly into the print (RSI > 65 on the daily), the risk/reward favors a straddle (buying both a call and a put) or staying cash. The implied volatility is high, so buying naked options is expensive. A Call Spread or Put Spread is safer to manage IV crush.

Investors should look past the headline revenue number. The entire story is now about Margins. Nio has proven it can sell cars (Onvo is a hit); now it must prove it can make money on them.

Summary

Nio’s Fiscal Q3 2025 earnings is scheduled for Tuesday, November 25, 2025 (Pre-market).

The Core Narrative: Volume vs. Margin Nio has successfully transitioned from a niche premium player to a mass-market volume leader. With October 2025 deliveries hitting a record 40,397 units (driven by the Onvo L60 and the new Firefly brand), the demand question is settled. The market’s focus has now shifted entirely to profitability.

Key Metrics to Watch

Vehicle Margin (The Danger Zone): This is the primary risk. As the product mix shifts toward cheaper Onvo and Firefly models, Average Selling Price (ASP) is dropping. Investors need to see a blended vehicle margin above 13.5%. If margins dip below 12%, it signals that Nio is "buying revenue" at the cost of sustainable profit.

Revenue & EPS: Consensus estimates are RMB 22.3B in revenue and an EPS loss of ~RMB 1.64. A revenue beat is expected given the volume; the EPS figure will determine if cost-cutting is working.

Q4 Guidance: To sustain the stock’s recent momentum, management must guide for 115,000–125,000 deliveries in Q4, confirming the "supercycle" is real and not just a launch spike.

Trading View The stock is primed for volatility (implied move ±8%).

Bull Trigger: Margins hold steady (>13%) despite lower ASPs.

Bear Trigger: Margins collapse (<11%) or Q4 guidance hints at supply chain bottlenecks.

Bottom Line: The "growth" box is checked. Tuesday is about proving Nio can scale efficiently.

Appreciate if you could share your thoughts in the comment section whether you think NIO can confirm that the “supercycle” is real for the deliveries guidance.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.