Niu's Exploding Costs Overshadow China Sales Boom

Chinese electric scooter maker Niu Technologies (NASDAQ:NIU) stock plunged Monday after the company reported a wider first-quarter loss despite strong revenue growth and rising China sales. Niu Stock Slides After Wider Q1 Loss The company reported first-quarter revenue of 909.5 million Chinese yuan ($131.85 million), up 33.4% year over year, driven by a 28.7% increase in e-scooter sales volume and higher revenue per vehicle. Adjusted loss per ADS widened to 17 cents from a loss of five cents a year earlier. Niu sold 261,624 e-scooters during the quarter, up 28.7% from a year earlier. China sales climbed 35.4% to 247,938 units, while international sales fell 32.4% to 13,686 units. China Market Fuels Sales Momentum Revenue from China e-scooter sales rose 41.6% to 773.6 million Chinese yuan, accounting for 93.8% of total e-scooter revenue. The increase was supported by stronger sales volumes and improved pricing in China. International e-scooter revenue declined 15.2% to 50.9 million Chinese yuan due to weaker kick-scooter sales overseas. Accessories, spare parts and services revenue increased 12.5% to 85 million Chinese yuan, helped by growth in the Niu App business and China accessories sales. Gross margin edged up to 17.4% from 17.3% a year earlier as favorable product mix and cost controls in China offset weaker international margins. The company ended the quarter with 1.16 billion Chinese yuan in cash, term deposits, and short-term investments in aggregate. Niu Profitability Under Pressure Profitability came under pressure during the quarter as Niu sharply increased spending on marketing, technology, and expansion initiatives while simultaneously working through elevated overseas inventory levels. Operating expenses surged 59.7% year over year to 263.6 million Chinese yuan as the company front-loaded branding campaigns, expanded domestic store openings, and invested in AI-related technology modules ahead of an expected market recovery. At the same time, management said excess micro-mobility inventory in Europe and the U.S. is forcing aggressive promotional activity and clearance pricing, a strategy the company expects will continue weighing on international margins through the rest of 2026. Electric Motorcycles Drive Expansion Strategy CEO Yan Li said electric motorcycle sales tripled year over year during the quarter as Niu expanded into lower-tier cities across China. He said the segment has become the company's primary growth engine for 2026. Li also highlighted Niu's push into AI-powered mobility technologies, including intelligent riding systems, adaptive lighting, ABS, and traction control features for future products. AI Products And Smart Mobility Push The company said its AI-powered NQi2 Ultra electric bicycle and NX Marathon electric motorcycle were key product launches during the quarter. Li said the NX Marathon generated more than 91 million Chinese yuan in sales within five hours of launch. International Restructuring And Dealer Expansion Niu said it continues restructuring international operations to focus on profitability rather than shipment growth. The company expanded its European dealer network to 360 active locations during the quarter and expects that number to exceed 400 by year-end. Niu Outlook And Stock Performance For the second quarter, Niu forecast revenue between 1.57 billion Chinese yuan and 1.821 billion Chinese yuan, representing growth of 25% to 45% year over year. NIU Price Action: Niu shares were down 17.61% at $2.34 at the time of publication on Monday. The stock is trading at a new 52-week low, according to Benzinga Pro data. Photo via Shutterstock