NIO Inc. (NIO.SI) shares plummeted 3.21% in pre-market trading on Friday, as investors reacted to recent analyst downgrades and disappointing first-quarter results. The Chinese electric vehicle maker faces increasing pressure amid concerns about its financial performance and growth prospects.

Daiwa Capital Markets has cut its full-year earnings forecast for NIO, raising its 2025 net loss projection to CNY12.4 billion from the previously estimated CNY11 billion. Although Daiwa maintains a buy rating on NIO, it has lowered its target price for NIO's American Depositary Receipts (ADRs) to $8.10 from $10.00, citing weaker-than-expected first-quarter results.

Adding to the pessimism, Morningstar senior equity analyst Vincent Sun expressed disappointment in NIO's Q1 margins and cost control. Sun noted that while revenue rose 21% year-over-year, it still missed the low end of guidance due to heightened competition, inventory clearance, and changes in model mix. Morningstar has reduced its fair value estimate for NIO to $5 from $5.60, maintaining a cautious stance on the company's ability to grow sales and narrow losses. These analyst reports have likely contributed to the negative sentiment surrounding NIO's stock in early trading.