Is NIO Striking a Perfect Balance Between Battery Cost & Performance?

NIO Inc. NIO has developed a suitable and optimal battery technology that balances performance, weight and efficiency, in an effort to gain an edge over its industry peers. Most competitors of NIO face a trade-off between battery cost and driving range by choosing lithium iron phosphate (LFP) systems with packs of around 90 to 100 kilowatt-hours, which are often big and heavy.

In contrast, NIO has engineered battery packs that deliver comparable range and performance while being significantly lighter. For instance, the ONVO L90 utilizes an 85-kilowatt-hour pack, and the ES8 is equipped with a 102-kilowatt-hour pack. Despite the smaller capacity compared to some rival systems, both models achieve range and performance on par with competitors. The key advantage lies in weight efficiency. The 85-kilowatt-hour pack weighs approximately 400 kilograms, while the 102-kilowatt-hour version is about 500 kilograms. This makes NIO’s battery pack roughly 200 kilograms lighter than many of its peers.

This weight reduction not only enhances vehicle efficiency and performance but also contributes to cost optimization. NIO has made the 100-kilowatt-hour battery the standard for its 5 and 6 series models and discontinued many of the launch offers that were initially provided. Following this update, the company experienced an increase in customer inquiries and leads. NIO carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NIO’s Peers Using LFP Battery Packs

BYD Company Limited BYDDY delivers enhanced safety, durability and performance while maximizing battery space efficiency with its Blade Battery. Designed in a blade-like shape, BYD’s battery uses LFP as the cathode material to provide far greater safety compared to traditional lithium-ion batteries. The BYD TANG, HAN, and ATTO 3 models all come fitted with the Blade Battery.

XPeng Inc.’s XPEV 2025 G6 features an upgraded LFP battery, 68.5 kWh for Standard Range and 80.8 kWh for Long Range/Performance, replacing XPeng’s older 66 kWh and 87.5 kWh lithium-ion packs. Like the G6, the XPeng P7+ uses an advanced 800V LFP pack, which enables 10-80% ultra-fast charging in just 12 minutes. At only 109 mm thick, it is the world’s thinnest battery pack.

NIO’s Price Performance, Valuation and Estimates

NIO has outperformed the Zacks Automotive-Foreign industry year to date. Its shares have gained 48.9% compared with the industry’s growth of 2.8%.

From a valuation perspective, NIO appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.77, higher than the industry’s 0.45.

The Zacks Consensus Estimate for NIO’s 2025 and 2026 loss per share has narrowed by 5 cents and 15 cents, respectively, in the past 30 days. 

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This article originally published on Zacks Investment Research (zacks.com).

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