NIO or Li Auto: Which Chinese EV Maker Has an Edge Now?

China's new-energy vehicle (NEV) market — comprising battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) — continues to sizzle. More than 11 million NEVs were sold in the country last year, up 40.7% from 2023, per China Passenger Car Association (CPCA). In the first quarter of 2025, sales of passenger NEVs in China were estimated at 2.86 million units, up 43% from the year-ago period, per CPCA.Government subsidies and rising consumer demand for cleaner transportation backed the growth. But as competition intensifies and a brutal price war rages, the question is which of the homegrown automakers is better positioned to navigate the road ahead — NIO Inc. NIO or Li Auto LI? Let’s take a closer look at both companies across several key parameters to assess which one currently holds the edge, and more importantly, which might be the smarter investment now.Product Lineup & Upcoming OfferingsLi Auto has built a strong reputation around its extended-range electric vehicles (EREVs), a hybrid solution offering both EV benefits and range flexibility. Each of its popular L series vehicles — L6, L7, L8, and L9 — has delivered over 200,000 units. Last year, it launched its first pure battery electric model, the MEGA. Li Auto plans to launch additional BEVs including Li i8, i6, i7 and i9 over the next 12-18 months. Li i8 is expected to be launched in July, while i6 will be released later in the second half of 2025.Meanwhile, NIO has been focusing on building pure EV models only. NIO's vehicle lineup includes ES6, ET5T, ES8, EC6, ES7, ET5, ET7, EP9, EVE, ET9 and EC7 models. In late March 2025, the company commenced delivery of the NIO ET9. In December 2024, the company launched NIO 89— which will commence deliveries at the end of this month. Another major product from the namesake brand will be launched in the second half of this year.  Besides the NIO series, the company has two more brands— mainstream mass-market brand ONVO and high-end small car brand Firefly. ONVO’s first product, L60, has been well received, and its second product, L90, is expected to begin deliveries in the third quarter of 2025. ONVOs third product will be launched in the fourth quarter. Firefly’s first model is set for launch later this month.While NIO offers more variety in terms of pure EV models, Li Auto’s diversification from EREVs to BEVs appears strategically timed and could boost deliveries significantly.DeliveriesLi Auto delivered 500,508 vehicles last year, up 33% from 2023 levels. With over 500,000 annual vehicle deliveries within just five years of the company’s first delivery, LI set a new benchmark as the fastest-growing premium auto brand in the Chinese market. In the first quarter of 2025, LI delivered 92,864 units, in line with its guided range and up 15.5% year over year. Li Auto’s cumulative deliveries totaled 1,226,736 units as of March 31, 2025.NIO delivered 221,970 vehicles in 2024, marking a 30.7% year-over-year increase. While that’s impressive, it’s less than half of Li Auto’s total. In the first quarter of 2025, NIO delivered 42,094 units, up 40.1% year over year and within the guided range. As of March 31, 2025, NIO’s cumulative deliveries totaled 713,658 units. While NIO’s pace is picking up, Li Auto remains far ahead in volume.Revenues, Margins & Bottom LineLi Auto leads comfortably when it comes to financial performance. Its total revenues were $19.8 billion in 2024 (up 16.6% year over year), with vehicle sales making up the bulk. It achieved an operating profit of $961 million and a net income of $1.5 billion last year, underlining its status as a profitable EV maker.NIO, on the other hand, generated just over $9 billion in revenues in 2024 (up 18.2% year over year), with vehicle sales accounting for 89% of the total. The company incurred an operating loss of $3 billion. Its net loss was also more than $3 billion. While it is aiming for breakeven by the fourth quarter of 2025, profitability remains a challenge.Let’s take a look at vehicle margins, a key metric for these EV companies. Li’s vehicle margin was 19.8% in 2024, down from 21.5% in 2023 but still better than NIO whose vehicle margin in 2024 came in at 12.3%, up from just 9.5% in 2023. However, the company couldn’t meet its target of achieving 15% vehicle margins by the end of 2024.  For 2025, the company expects a vehicle margin of 20% for the NIO brand and 15% for the ONVO brand. If NIO is able to deliver that, it will be a huge improvement. But for now, Li Auto’s vehicle margins remain superior.Balance SheetLi Auto holds a strong balance sheet with $9 billion in cash and manageable long-term debt of $1.1 billion as of Dec. 31, 2024. This financial flexibility allows it to invest heavily in R&D, charging infrastructure and overseas expansion without straining its core operations.In comparison, NIO holds just $2.6 billion in cash and carries $1.56 billion in long-term borrowings. Its long-term debt-to-capitalization ratio of 76% indicates elevated leverage. On this front, Li Auto clearly has an upper hand. Image Source: Zacks Investment ResearchRetail and Global ExpansionLi Auto continues to scale rapidly. As of 2024 end, it operated 502 retail stores and 478 service centers across China and had more than 1,700 supercharging stations. Plans are underway to expand to 4,000 stations by the end of 2025. Early this year, it opened its first overseas R&D center in Munich and launched service centers in Kazakhstan, Dubai and Uzbekistan.NIO has a significant retail presence too, with 180 NIO Houses, 603 NIO Spaces, 385 service centers, 67 NIO Delivery Centers globally and 300 ONVO stores as of 2024 end.The company hopes to enter 25 countries by the end of 2025.Technology & InnovationBoth companies are investing aggressively in future tech, but their focus areas differ. NIO’s battery swap technology is a major positive. It has deployed more than 3,200 power swap stations worldwide. Last month, NIO and CATL inked a deal to jointly build the world’s largest and most advanced battery swap network for passenger cars. NIO’s CEO William Li called this a "pivotal moment," underscoring the partnership’s significance in pushing battery swapping into a new phase of growth.Meanwhile, Li Auto is making major strides in autonomous driving. It has rolled out advanced driver assistance systems like Li AD Max and Pro, which offer capabilities for urban and highway navigation. Backed by NVIDIA’s powerful chips, the company’s tech is evolving quickly. Notably, it became the first Chinese automaker to deploy AI models trained on 10 million video clips, putting it in a strong position in the race toward self-driving cars. LI aims to evolve into a leading AI and robotics company by 2030. Li Auto plans to develop humanoid robots, but only after achieving level-4 autonomous driving capabilities.NIO’s battery swap bet could pay off big in the long run. Meanwhile, Li Auto’s practical and safety-focused autonomy strategy gives it a significant edge.Stock Performance and ValuationLi Auto has had a better run in the markets so far in 2025. Image Source: Zacks Investment ResearchBoth LI and NIO stocks trade at relatively low forward price-to-sales ratios compared to their two -year averages. While NIO may appear cheaper at first glance, investors should consider the underlying fundamentals. Li Auto’s profitable operations and leadership in self-driving tech arguably make it a more valuable proposition. LI has a Value Score of B, while NIO carries a Value Score of D. Image Source: Zacks Investment ResearchHow Do EPS Estimates Compare for LI & NIO?The Zacks Consensus Estimate for LI's 2025 EPS suggests no growth, while the 2026 estimate implies a year-over-year increase of 61.5%. The 2025 EPS estimate has trended downward over the past 30 days, whereas the 2026 estimate has moved higher. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NIO's 2025 and 2026 bottom line implies a year-over-year improvement of 28% and 53%, respectively. NIO’s loss estimates for 2025 and 2026 have widened over the past 30 days. Image Source: Zacks Investment ResearchLi Auto is the Safer ChoiceLi Auto currently holds the edge in several critical areas — vehicle deliveries, profitability, margins, financial health and self-driving capabilities. It’s not without its challenges as price wars and declining sales and margins could weigh on near-term performance. For instance, Li Auto’s revenue guidance for the first quarter of 2025 signals a year-over-year decline — the first in years. Although this may raise eyebrows, it seems to be a temporary hiccup amid intense pricing pressure. That said, its strategic pivot to BEVs and continued investment in AI and global growth position it well for the future.NIO, though innovative with its battery swap network and brand expansion, remains a work in progress. High losses, weaker margins and a leveraged balance sheet make it a riskier bet in the current environment.Between the two, Li Auto seems better placed. While the stock currently carries a Zacks Rank #3 (Hold) amid short-term pressure, it remains in a stronger position than NIO, which is currently Ranked #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 NIO Inc. (NIO): Free Stock Analysis Report Li Auto Inc. Sponsored ADR (LI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks