You have to see the positive side of life to be optimistic Nio (NYSE:NIO). The Chinese electric vehicle maker missed sales estimates, remains unprofitable and will now be forced to deal with the potential U.S.-China trade tensions that many expect from the new Trump administration.

All told, shares are down nearly 50% for the year. And yet, rising margins and expanding product lines could indicate better days ahead. As the sun sets in 2024, could Nio’s fortunes also soon improve?

An investor, known by the pseudonym Bluesea Research, believes the coming year looks promising for the troubled company.

“NIO is still posting big losses, but that could change in 2025 as margins improve and the company launches new models that should increase its delivery and revenue base,” the investor writes.

While Bluesea acknowledges the revenue challenges, it describes the improvement in metrics as a positive sign. The investor notes that Nio was able to increase gross margin by 2.7% year-over-year while also increasing shipments by 28.9% year-over-year.

The improved gross margins are particularly notable given the intense competition in China. “NIO’s management could only have made it through strong cost optimization,” writes Bluesea.

Looking ahead, investor Nios highlights Wall Street’s bullish views on revenue forecasts of $13.5 billion for the fiscal year ending December 2025. Reaching that mark would represent 43.6% year-over-year growth, showing that Wall Street is optimistic about NIO’s ability to build on existing premium sales while expanding with cheaper models.

When it comes to US-China trade relations, the investor argues that the Trump administration’s hawkish stance could actually calm trade tensions.

“I believe the ultra-hawkish foreign policy stance of the next Trump administration could be a major tailwind for NIO and other Chinese stocks,” the investor posits. Bluesea explains that Trump’s aggressive policies will ease uncertainty, while bilateral visits during the former and future president’s first terms have also helped ease tensions.

The downside of falling share prices is that the shares have become significantly more attractive. With a PS ratio of 1.0, Nio is currently trading at a “rock bottom” price. In comparison, competitors Tesla and Lucid are trading with horsepower ratios of 16.5 and 8.0, respectively, writes Bluesea.

“NIO stock can be a good option for investors looking to enter the EV sector,” concludes the investor, who rates NIO a “Buy.” (To view Bluesea Research’s track record, click here)

Wall Street seems to agree that 2025 will be a significant improvement over the current year. With 6 Buy, 4 Hold, and 2 Sell ratings, NIO enjoys a consensus rating of Moderate Buy. Its 12-month price target of $5.99 implies a gain of about 32%. (See NIO stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is for informational purposes only. It is very important to do your own analysis before investing.