Nio’s CEO, William Li, has disclosed that negative public sentiment has significantly impacted sales of the company’s Onvo sub-brand, reducing potential sales volume by 30-40%. This revelation came during Nio’s earnings call on March 21st, following the release of its fourth-quarter and full-year 2024 financial results.
Despite these challenges with its sub-brand, Nio has set an ambitious target to achieve profitability by the fourth quarter of 2025, supported by aggressive cost-cutting measures and operational restructuring.
“Recent market competition and negative public opinion have adversely affected Onvo’s sales performance,” Li explained during the call. He attributed the sales shortfall to several factors, including lower brand awareness compared to competitors, pressure on new orders after fulfilling existing ones, insufficient sales experience among staff, and initial battery supply constraints.
Nio is implementing branding, channel strategy, and employee training improvements to address these issues. The company is increasing efficiency between Nio and Onvo by sharing resources in after-sales service, battery swapping infrastructure, and management support, although the sales networks will remain separate. Despite the challenges, Li noted that Onvo’s sales have surpassed Nio’s in 12 regions, suggesting the dual-brand strategy still holds potential.
For 2024, Nio reported a record-high total revenue of 65.732 billion yuans (9.1 billion USD), an 18.2% year-over-year increase. However, the company’s net loss grew to 22.402 billion yuans for the year, up 8.1% from 2023.
In its drive toward profitability, Nio has implemented what it calls “aggressive cost reduction targets” across research and development, supply chain optimization, and sales operations. The company has also introduced a “Core Business Unit” (CBU) operating mechanism, dividing its business into 12 core units to enhance efficiency and improve return on investment.
Margin improvement is central to Nio’s profitability plan, with targets of 20% for the Nio brand and 15% for Onvo by the end of 2025. The company achieved a 10% reduction in vehicle Bill of Materials costs in 2024 and expects its self-developed Shenji 9031 chip to reduce per-vehicle costs by 10,000 yuan(1,400 USD).
For Q1 2025, Nio anticipates delivering between 41,000 and 43,000 vehicles, representing a year-over-year increase of approximately 36.4% to 43.1%. The expanded 2025 product lineup includes the flagship ET9 sedan, updated versions of existing models, Onvo’s second model (L90), and the first vehicle from its global-focused Firefly brand.
With these initiatives and a strong cash reserve of approximately 42 billion yuan, Nio remains confident in its path to profitability despite the challenges facing its Onvo sub-brand.
