NIO's Next Earnings Report on September 1 Could Send the Stock Soaring. Here's Why.

Electric vehicles (EVs) have had a rough ride over the last two years in the U.S., with major carmakers like Ford and Honda curtailing EV production, or even canceling some EV models outright.

That stands in sharp contrast to the rest of the world, particularly China, where EV carmakers – juiced by government incentives and an opportunity to seize market share from dominant U.S. and European brands – are flourishing after years of early stage struggles.

One Chinese EV maker, Nio (NYSE:NIO), has been hit particularly hard over the last five years. But its upcoming earnings report could send the stock soaring.

Here's why Nio's upcoming earnings report could be a game changer for its shareholders.

Image source: The Motley Fool.

How Nio is different

Although battery-powered electric vehicles (BEVs) are cheaper to operate and maintain than gasoline or hybrid vehicles, there are two important metrics on which they aren't yet competitive with their fossil-fuel-powered brethren: cost and refueling time.

BEVs generally cost thousands of dollars more than comparable gas-powered vehicles or hybrids, and powering them to a full charge, even at a high-powered DC fast-charging station, takes 20 to 60 minutes, far longer than filling up at a gas station.

Nio has come up with a unique solution for these problems. Instead of including the batteries in the purchase price of a Nio vehicle, Nio allows buyers to subscribe to a "Battery-as-a-Service" feature for a monthly fee.

Image source: Getty Images.

Paying the fee allows drivers to visit a special Nio "battery swap" station where they swap their depleted battery array for a fully charged one. The process takes only a few minutes, comparable to the time it takes to fill a gas tank.

This system allows Nio to advertise a lower sticker price for its vehicles and lock in a recurring revenue stream from the battery-swap service.

The only problem for Nio is that, for the battery swap service to be a viable option, it needs to build and maintain a network of battery swap stations, which entails high upfront costs.

Why Nio's earnings report is critical

Nio's shares bottomed out at $3.14/share in early 2025. After it posted a quarterly net profit for the first time, the stock jumped to $6.87/share in April, but has since fallen back to $4.38/share, down 93% from its all-time high.

Despite the decline in its share price, Nio's trailing twelve-month (TTM) revenue has skyrocketed this year to $14.3 billion.

That's because Nio's vehicle deliveries have been soaring. As of July 31, Nio had delivered 227,057 vehicles, a 68% increase from July 2025.

But revenue growth has never been a problem for Nio. Profitability has. Nio's TTM net losses had been moving in the wrong direction for almost a decade, hitting a low point of -$3.4 billion in Q3 2025.

Since then, the company has seen remarkable improvement in its bottom line. It even managed to squeak out a net profit of $17.1 million in Q4 2025, only to post a net loss again in Q1 2026.

That single quarter of net profit immediately caused a 20% jump in the company's stock price. Over the next several weeks, it continued to climb to a 45.6% gain. But the return to a net loss in Q1 had the exact opposite effect: an immediate plunge in share price, followed by months of declines.

If Nio's management announces a net profit in its Q2 earnings report on Tuesday, investors should expect the stock to immediately pop, just like it did in Q4.

John Bromels has positions in Ford Motor Company and Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.