HSBC Upgrades NIO Stock to Buy. Here’s Why

FomoAnxiety · 2026-03-13T10:53:06+00:00

NIO achieved its first quarterly net profit of RMB122.4 million in Q4 2025, driven by increased vehicle deliveries and cost control. HSBC upgraded the stock to Buy, highlighting strong performance and an optimistic outlook despite competitive risks.

FomoAnxiety

2026-03-13 10:53:06

Abstract generation in progress

NIO (NIO) recently delivered a major milestone — its first quarterly net profit. The Chinese EV maker posted a profit of RMB122.4 million ($17.7 million) in Q4 2025, helped by strong vehicle deliveries and tighter cost control. Following the results, HSBC analyst Yuqian Ding upgraded the stock to Buy from Hold and raised the price target to $6.80 from $4.80, implying 23% upside potential from current levels.

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The analyst said NIO’s vehicle deliveries rose sharply in the quarter. Volumes increased 43% quarter over quarter and 71% year over year, far ahead of the broader EV market, which grew 5% quarter over quarter and 16% year over year.

HSBC’s View on NIO

HSBC said NIO’s profitability improved in the quarter, with vehicle gross margin rising to 18.1%, up three percentage points from the previous quarter. The improvement was mainly driven by strong deliveries of the ES8 model, which helped lift the overall product mix.

At the same time, NIO kept a close watch on costs. Selling, general, and administrative expenses (SG&A) and R&D spending both declined 15% from the prior quarter, reflecting tighter cost control and internal restructuring.

Looking ahead, HSBC expects NIO’s earnings to remain relatively strong in Q1 2026, supported by the improved product mix and fewer disruptions to deliveries compared with previous quarters.

Is NIO a Good Stock to Buy?

That said, some analysts remain cautious, warning that fierce competition and price cuts in China’s EV market could still hurt NIO’s margins.

According to TipRanks, NIO stock has a Moderate Buy consensus rating based on six Buys, three Holds, and one Sell assigned in the last three months. At $6.33, NIO’s share price target implies upside potential of 14.11%.

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