NIO Inc. (NIO) shares took a hit on Tuesday after the Chinese electric vehicle maker delivered a mixed bag of second-quarter results. The company posted strong growth in deliveries and margins, but its revenue fell short of Wall Street's expectations, and the outlook for the current quarter didn't do much to lift spirits.
NIO's Mixed Quarter: Deliveries Up, Margins Better, But Guidance Disappoints
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NIO shares dip as Q2 revenue of $4.74B misses Wall Street targets, despite strong delivery growth and improved margins. Stock down 1.9%.
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Revenue Misses, But Growth Remains Robust
NIO reported revenue of 32.14 billion Chinese yuan ($4.74 billion), up 69.1% year over year and 25.9% from the previous quarter. That's impressive growth by any measure, but it missed the analyst consensus estimate of $4.78 billion. The market, it seems, wanted a bit more.
On the earnings front, adjusted earnings came in at 0.01 yuan per American depositary share. That's a dramatic turnaround from an adjusted loss of 1.85 yuan per ADS a year earlier. Profitability is starting to look like a real thing for NIO, not just a distant dream.
Deliveries during the quarter hit 107,658 vehicles, up 49.4% year over year and 29% sequentially. Vehicle revenue jumped 80.1% from a year earlier, driven by higher deliveries and a favorable product mix. The company is selling more cars, and it's selling the ones that make more money.
Margins Are Getting Better
Gross margin rose to 18.4% from 10% a year earlier, though it slipped slightly from 19% in the first quarter. Vehicle margin reached 18.5%, up from 10.3% a year ago but down from 18.8% in the previous quarter. The sequential dip might be a minor concern, but the year-over-year improvement is the headline here.
NIO held 56.7 billion yuan ($8.4 billion) in cash, restricted cash, investments and long-term deposits as of June 30. That's a healthy war chest for a company that's still investing heavily in growth.
CEO William Bin Li cited sales momentum across the NIO, ONVO and FIREFLY brands. CFO Stanley Yu Qu said higher-margin models and cost controls supported profitability and cash reserves. In other words, the company is getting better at making money while it grows.
Delivery Momentum Continues
NIO delivered 35,836 vehicles in August, bringing the first eight months of 2026 total to 262,893 vehicles. Cumulative deliveries have now reached 1,260,485 vehicles. That's a lot of EVs on the road.
For context, rival Tesla Inc. (TSLA) delivered a record 480,126 vehicles globally during the second quarter, up 25% year over year. NIO is still much smaller than Tesla, but it's growing at a faster clip.
Third-Quarter Outlook: Not Quite Enough
Looking ahead, NIO expects third-quarter deliveries of 108,000 to 111,000 vehicles, which would represent growth of 24% to 27.5% from a year earlier. That's solid, but the revenue forecast is where things get a bit dicey.
The company projects revenue of 33.29 billion yuan to 34.05 billion yuan ($4.91 billion to $5.02 billion). That range implies growth of 52.7% to 56.2% year over year, but it falls below the $5.07 billion analyst consensus estimate. Investors don't love it when a company guides below expectations, even if the growth rate is still impressive.
NIO shares fell 1.91% to $4.15 in Tuesday's premarket trading. The market is clearly focused on the miss and the soft guidance, rather than the strong underlying trends.
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