Nio Shares Plunge 24.8% in December Amid Sector-Wide Challenges

Nio Inc. (NIO) experienced a sharp 24.8% drop in share value during December 2025, significantly outpacing broader market declines. The move followed a series of quarterly reports and macroeconomic signals that raised concerns about near-term demand and margin pressures in China’s EV market. Despite strong production volumes—Nio delivered 16,500 vehicles in December, up 11% from November—the stock reacted negatively, reflecting investor unease over pricing competition and rising R&D costs. The decline comes amid intensified rivalry in the premium EV segment, with competitors like XPeng and Li Auto adjusting pricing strategies and expanding model lines. Nio’s average selling price fell to $38,600 in Q4 2025, down from $41,200 in Q3, signaling aggressive market share defense. At the same time, the company reported a net loss of $247 million for the quarter, wider than the $198 million loss in the prior period, driven by increased investment in battery swapping infrastructure and international expansion. Market sentiment was further affected by a 12% slide in the CSI 300 Auto Index and a 6.3% depreciation of the renminbi against the U.S. dollar, which impacted foreign investor sentiment. Analysts at firms covering the stock have issued mixed recommendations: three upgraded to 'Buy', citing the stock’s current valuation at 8.7x forward P/E, below its three-year historical average of 12.3x, while four maintained 'Hold' ratings due to ongoing execution risks. Investors in NIO should closely monitor Q1 2026 delivery targets of 25,000 units and progress on the upcoming ET9 model launch, which is expected to debut in March. The stock’s performance may also hinge on policy developments in China’s new energy vehicle incentives and potential tax changes.