Chinese electric vehicle maker NIO Inc. (NIO) saw its stock climb on Thursday after reporting fiscal first-quarter results that beat expectations on revenue and showed meaningful margin expansion. The company is navigating a brutal price war in China's EV market, but its numbers suggest it's finding a way to compete without bleeding out.

Revenue came in at 25.53 billion Chinese yuan ($3.701 billion), up 112.2% year over year. That topped the analyst consensus estimate of $3.550 billion. Sequentially, revenue dipped 26.3%, which makes sense given the seasonal slowdown from Q4's year-end push.

On an adjusted basis, NIO earned 0.02 yuan per ADS, a massive improvement from a loss of 3.01 yuan per ADS a year earlier. That's the kind of swing that gets investors' attention.

Vehicle deliveries hit 83,465 units in the quarter, up 98.3% year over year. The sequential decline of 33.1% is typical for the first quarter, but the year-over-year growth shows demand is still strong. Vehicle revenue rose 129.2% year over year, driven by higher delivery volume and a higher average selling price thanks to a favorable product mix.

Competitive Position and Delivery Momentum

NIO is often called the "Tesla of China," and it's a label that comes with both flattery and pressure. For context, Tesla delivered a record 358,023 vehicles globally in the first quarter. NIO's 83,465 is a fraction of that, but the company is growing fast and focusing on premium segments where margins are better.

In April 2026, NIO delivered 29,356 vehicles. As of April 30, cumulative deliveries reached 1,110,413 units. That's a nice round milestone that underscores how far the company has come since its early days.

Margin Expansion and Balance Sheet Strength

The headline story here is margins. Gross margin rose to 19.0%, up from 7.6% a year ago and from 17.5% in the previous quarter. The improvement came mainly from higher vehicle margins, but also from better margins on power solutions and after-sales services.

Vehicle margin hit 18.8%, compared with 10.2% in the prior year and 18.1% in the previous quarter. That's the fourth straight quarter of sequential improvement, which is exactly the trend investors want to see.

NIO's balance sheet looks solid. As of March 31, the company held 48.2 billion yuan ($7.0 billion) in cash, cash equivalents, restricted cash, short-term investments, and long-term time deposits. That gives it plenty of runway to fund new product launches and R&D.

Executive Commentary

Founder, chairman, and CEO William Bin Li said the automaker has entered an intensive product launch and delivery cycle starting in the second quarter. He credited NIO's long-term investments over the past 11 years for building "comprehensive systematic innovation capabilities" that support new product launches and strengthen competitiveness.

Li highlighted that the all-new ES8 ranked first in China's large SUV segment and among SUVs priced above RMB 400,000 for five straight months. He also talked up the ES9 flagship executive SUV, which he said combines multiple industry-first technologies and aims to lead the premium executive SUV segment into the battery-electric era.

On the sub-brands, Li said ONVO's upcoming models will receive major smart-technology upgrades powered by NIO's self-developed smart driving chip, NIO WorldModel, and full-domain operating system. The newly launched ONVO L80 flagship SUV targets broader consumer demand through its space-focused and lifestyle-oriented design. Meanwhile, FIREFLY plans to introduce additional special-edition models to strengthen customer engagement.

CFO Stanley Yu Qu said NIO continued to improve profitability and efficiency in the first quarter, with vehicle margins rising for a fourth straight quarter and other sales margins hitting a four-year high of 20.6%. He added that the company maintained positive non-GAAP operating profit and increased cash reserves as it focuses on further cost controls and sustainable growth.

Outlook Signals Continued Growth

For the second quarter of 2026, NIO expects vehicle deliveries between 110,000 and 115,000 units. That would represent growth of about 52.7% to 59.6% compared with the same period in 2025.

The company forecasts quarterly revenue between 32.78 billion yuan ($4.75 billion) and 34.44 billion yuan ($4.99 billion). That guidance implies year-over-year growth of about 72.4% to 81.2% and exceeds the analyst consensus estimate of $4.550 billion.

NIO shares were up 4.83% at $5.860 during premarket trading on Thursday, according to market data.