NIO or LI: Which Chinese EV Stock Looks Better Placed Pre-Q2 Earnings?

Two of China’s biggest noted vehicle makers, NIO Inc. NIO and Li Auto LI, are about to report their second-quarter 2025 results. Li Auto will release its numbers this Thursday, while NIO will follow next Tuesday. Ahead of their results, the question is: Which of these two EV players looks better positioned right now?Product LineupLi Auto has built its success on a hybrid approach. Its extended-range electric vehicles (EREVs) combine EV benefits with the reassurance of a gasoline-powered generator, easing range anxiety for Chinese drivers. The company’s popular L-series — L6, L7, L8 and L9 — has captured strong demand. Li also ventured into pure battery EVs with the MEGA last year, while recently adding the Li i8, a six-seat family SUV, to its lineup. Another model, the Li i6, is expected to debut soon.NIO, on the other hand, has gone all-in on pure EVs. Its portfolio includes a broad range of sedans and SUVs such as the ES6, ES8, EC6, ET5, ET7 and ET9. The company is also set to launch its redesigned ES8 later this year. Beyond the NIO brand, NIO is expanding with ONVO, its mass-market division, which has already launched the L60 and L90, with a third model on the way. Its premium small car brand, Firefly, started deliveries in April. This three-pronged strategy highlights NIO’s ambition to capture different segments of the EV market.Deliveries and GrowthIn terms of sheer numbers, Li Auto continues to outpace NIO. For the second quarter of 2025, Li delivered 111,074 vehicles, while NIO delivered 72,056. However, the growth picture tells a different story. Li’s deliveries were only up 2.3% year over year, suggesting demand is stabilizing. Meanwhile, NIO’s deliveries surged 25.6% compared to last year, signaling a stronger momentum shift in its favor.Profitability and MarginsMargins are a critical measure of EV makers’ financial health. NIO’s vehicle margin climbed to 10.2% in the first quarter of 2025, an improvement from 9.2% a year ago. The gain was driven by better scale, lower costs per unit and stronger efficiency in its supply chain.Li Auto remains ahead in this metric. Its vehicle margin stood at 19.8% in the first quarter, slightly up from 19.3% in the prior year. The company’s ability to maintain high margins speaks of its cost discipline and pricing power. For now, Li holds the edge on profitability.Financial StrengthThe balance sheet comparison tilts in Li Auto’s favor. As of March 31, 2025, Li Auto held about $15.3 billion in cash, giving it ample resources to fund research, innovation and expansion.NIO’s cash position was 3.6 billion, far smaller in scale. Additionally, NIO’s long-term debt-to-capitalization ratio is 75%, while Li Auto’s is just 10.8%. This makes Li Auto far less leveraged and financially sturdier. Image Source: Zacks Investment ResearchTechnological BetsThe real face-off between the two lies in their technological visions.NIO’s big bet is its battery swap network, part of its Battery-as-a-Service model. This allows drivers to swap out depleted batteries for fully charged ones in just minutes. With more than 3,400 swap stations and more than 26,000 chargers already installed, NIO is building a network that could become a game-changer in EV adoption. The company is even constructing a new facility in Wuhan, with plans to roll out 1,000 new swap stations annually.Li Auto is focused on autonomous driving. Its Li AD Max and Pro systems already support advanced urban and highway navigation. Powered by NVIDIA chips, the company is pushing toward level-4 autonomy. Management has even hinted at developing humanoid robots after it achieves that milestone. While futuristic, Li’s current ADAS features already provide safety and convenience, making autonomy a core strength.NIO & LI’s Stock Performance and ValuationStock performance paints another interesting contrast. Over the past six months, NIO shares have risen 27%, reflecting renewed optimism around its growth prospects. Meanwhile, Li Auto stock has fallen 25%, weighed down by slowing delivery growth and cautious sentiment.Image Source: Zacks Investment ResearchValuation adds another layer. Both stocks trade at relatively low forward price-to-sales ratios compared to their five-year averages, but NIO trades at a lower multiple than Li. That makes NIO more attractively valued at current levels. Image Source: Zacks Investment ResearchWhat Do Estimates for NIO & Li Auto Say?NIO appears to have the stronger growth runway. The Zacks Consensus Estimate for NIO’s sales suggests growth of 50% in 2025 and another 36% in 2026. Its bottom line is also projected to improve meaningfully, with the loss expected to narrow 32.5% this year and 68.2% next year.Li Auto’s forecasts are more tempered. Sales are projected to grow just 6% in 2025 before accelerating to 36% in 2026. Its 2025 earnings are expected to decline 13% before rebounding with a 61% jump in 2026. On top of that, recent analyst revisions have trended upward for NIO, while Li has seen downward revisions — a sign of growing confidence in NIO and more cautious sentiment toward Li.Final Verdict: NIO Has the EdgeBoth NIO and Li Auto have carved out unique strengths in China’s EV market. Li Auto’s extended-range EVs, strong balance sheet and higher margins make it a stable player in the industry. However, slowing delivery growth and a Zacks Rank #5 (Strong Sell) raise concerns about its near-term prospects.NIO, on the other hand, is showing accelerating deliveries, strong growth forecasts and a more attractive valuation. Its battery swap strategy and expanding multi-brand portfolio also give it powerful long-term catalysts.With a Zacks Rank #3 (Hold) and upward earnings revisions, NIO looks better positioned than Li Auto heading into the earnings season. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 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