NIO Stock Slips In Hong Kong: CEO Warns China Auto Sales Could Plunge 20%, But Sticks To 50% Growth Target For Nio

• Li said China's auto industry has entered its most brutal phase, with retail sales down 19.5% in the first five months of 2026.
• Despite the slowdown, Li reiterated Nio's target of 40%-50% sales growth this year.
• The company has invested over 68.8 billion yuan in R&D and 20 billion yuan in charging and battery-swap infrastructure.

Shares of Nio, Inc. (NIO) slipped 1% in Hong Kong on Monday after CEO William Li warned that China's auto market could contract by 15% to 20% this year, even as he reaffirmed expectations for Nio to grow sales by 40% to 50%.

Nio’s U.S.-listed shares logged their second straight week of losses, declining 3%. 

Nio CEO Sounds Alarm On Auto Sales

Speaking at the China Auto Chongqing Summit over the weekend, Li said the Chinese auto industry has entered the most brutal final stage of competition and warned that hopes for a near-term rebound are misplaced. Any illusions about a sales recovery should be shattered, he said, according to CnEVPost. 

According to Li, China's domestic auto retail market declined 19.5% from the previous year in the first five months of 2026, and fell even further in early June, with sales down more than 22%. However, Li reiterated Nio's goal of achieving 40%-50% sales growth this year.

The auto industry is a marathon on a muddy road, Li said, adding that there are no miracles or shortcuts to success. Li also highlighted the shift toward EVs, noting that China's new-energy vehicle penetration rate hit 62.9% in May, while pure battery-electric vehicles accounted for 42.2% of the market. He said the transition to EVs is irreversible as charging and battery-swap infrastructure improve.

Nio Bucks The Downturn

While Li painted a gloomy picture for the broader industry, Nio's own business continues to grow rapidly. The company delivered 150,526 vehicles between January and May, up 68.7% from a year earlier. Nio also posted an operating profit of 1.25 billion yuan ($184.6 million) in the fourth quarter of 2025 and remained profitable in the first quarter of 2026 with an operating profit of 68 million yuan.

The company has also guided for second-quarter deliveries of 110,000 to 115,000 vehicles. Li said Nio's multi-brand strategy is helping the company gain market share despite the broader slowdown.

According to the CEO, Firefly has outsold the combined sales of Mini and Smart in China's premium compact EV segment and has led the category since launch. Demand continues to exceed supply, with customers still facing delivery wait times. Nio's flagship ES8 has been the top-selling large SUV in its segment for six consecutive months, while Onvo's L60 and L90 continue to generate strong demand.

Last week, Onvo began nationwide deliveries of the updated L60, featuring Nio's in-house Shenji smart-driving chip, new LiDAR-equipped variants and lower entry pricing. The company also opened its first store in Greece, Nio House Athens, through a partnership with Motodynamics Group last week. 

How Nio Is Cutting Costs

Li said Nio is investing aggressively in tech it believes will determine the winners of the industry's knockout stage. Over the past 11 years, the company has invested more than 68.8 billion yuan in research and development and over 20 billion yuan in charging and battery-swap infrastructure.

At the same forum, Nio Associate Vice President Ma Lin said that the company's internally developed Shenji chips have improved efficiency and reduced costs previously associated with Nvidia-powered systems. The company has also implemented broader cost-control measures, helping first-quarter R&D expenses fall more than 40% year-over-year while vehicle margins improved to 18.8%.

How Do Retail Traders Feel About NIO?

On Stocktwits, retail sentiment for Nio was ‘bearish’ amid ‘low’ message volume.

One user said, “This stock trading at 0.6x sales, 1.7X cash and a $12 Billion market cap is long overdue to trade to $10.00-$12.00 and stay there. Can only hope after we get through this major options week of 650,000 call options expiring worthless, the run will start to $10-$12.”

Another user said, “CEO said 40-50% growth this year. If he says this at this period of the year It Means that he is confident in what he says.”

Nio’s U.S.-listed stock has risen 44% over the past year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: ASTS Stock Jumps Overnight: Retail Eyes Potential Win As Japan's $1B 'Starlink' Award Nears Decision