How's NIO Adjusting Production Priorities to Meet Growing Demand?

NIO Inc. NIO notified during its second earnings call that it has four models with order backlogs for which customers are waiting to pick up their vehicles. These include the L90, the all-new ES8, the L60 and the FIREFLY. From a production capacity standpoint, NIO is prioritizing the L90 and the all-new ES8 and working closely with supply chain partners to ramp up output to meet strong market demand.

For the ONVO brand, production of the L90 has taken priority over the L60. As a result, L60 customers are also experiencing delays in picking up their vehicles. NIO’s target for October is to bring the ONVO L90’s full supply chain capacity to 15,000 units per month. Starting in October, the company expects overall ONVO production capacity to return to normal levels, primarily supported by increased battery production. Over the past several months, NIO has been collaborating with battery suppliers to expand output. With this, the ONVO brand is projected to reach a total supply chain production capacity of around 25,000 units per month in the fourth quarter.

For the ES8, production ramp-up is taking slightly longer. NIO expects ES8’s full supply chain capacity to reach 15,000 units a month by December. Moreover, FIREFLY production and supply capacity are steadily increasing. By the fourth quarter, monthly production capacity for FIREFLY is expected to peak at 6,000 units. 

Taking into account both demand and available supply capacity, the company has set a fourth-quarter delivery target of 50,000 units per month across its three brands, totaling 150,000 units for the quarter. 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.

Production Strategy of NIO’s Competitors

Li Auto Inc. LI launched the Li i8 on July 29, 2025. Since its debut, the model has received highly positive feedback from test drives. The company’s production facilities are operating at full capacity, with efforts underway to further ramp up output. Li Auto aims to deliver between 8,000 and 10,000 units of i8 cumulatively by the end of September.

Tesla, Inc. TSLA began production of its lower-cost model in the first half of 2025, as scheduled. However, due to Tesla’s priority on building and delivering as many vehicles as possible in the United States ahead of the EV credit expiration, along with the added complexity of introducing a new product, the production ramp is expected to progress more slowly than initially planned. Tesla now expects the ramp to shift to the fourth quarter. Per Teslarati, Tesla’s Giga Berlin recently raised its production plans for the third and fourth quarters.

NIO’s Price Performance, Valuation and Estimates

NIO has outperformed the Zacks Automotive-Foreign industry year to date. Its shares have surged 61% compared with the industry’s growth of 4.2%. 

 
From a valuation perspective, NIO appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.83, 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 10 cents, respectively, in the past 30 days. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research