First time in 11 years to turn a quarterly profit NIO: Full-year profitability target remains unchanged for 2026

Cailian Press, March 11 — (Reporter Xu Hao) On March 10, NIO Inc. released its Q4 and full-year 2025 financial reports, showing that the company achieved an operating profit of 1.25 billion yuan in Q4 2025, marking its first quarterly profit.

“Quarterly profitability reflects the continuous improvement of NIO’s systematic capabilities and operational efficiency,” said Li Bin, Chairman of NIO. In its previous profit forecast, NIO clearly outlined three key factors for achieving single-quarter profitability: “The company’s sales continued to grow in Q4 2025; favorable product mix drove optimization of vehicle gross margins; and ongoing comprehensive cost reduction and efficiency measures.”

Expected Profitability

NIO’s profitability in Q4 2025 was primarily supported by increased deliveries and the realization of scale effects; the growth in deliveries led to cost dilution and product structure optimization, significantly boosting gross margins.

The financial report shows that in Q4 2025, NIO delivered 124,807 new vehicles, a year-over-year increase of 71.7% and a quarter-over-quarter increase of 43.3%, setting a new record. Correspondingly, revenue for the quarter reached 34.65 billion yuan, up 75.9% year-over-year and 59.0% quarter-over-quarter, also a record high.

Although the average selling price per vehicle in 2025 dropped to 236,000 yuan, the strong sales of high-margin models drove product mix optimization and improved profitability. In December 2025, NIO’s ES8 achieved 22,256 deliveries in a single month, accounting for nearly 70% of NIO’s total sales, with a gross margin of 20%. Meanwhile, the “5566” series and the Leado L90 maintained gross margins between 15% and 20%.

In terms of overall sales composition, the Leado L60, priced between 206,900 and 255,900 yuan, accounted for about 20% of annual sales; the NIO ET5T, priced between 298,000 and 316,000 yuan, and the ES8 (including some older models), priced between 406,800 and 446,800 yuan, each accounted for approximately 14%. These three main models together made up nearly 50% of total sales.

“Achieving profitability in Q4 was within expectations,” said a former CFO of a Hong Kong-listed company who wished to remain anonymous. “The main reasons are the sales growth and gross margin improvement driven by the ES8 in 2025, along with cost reductions, especially controlling R&D expenses.”

The financials show that R&D expenses gradually decreased each quarter in 2025, from 3.18 billion yuan in Q1 to 2.02 billion yuan in Q4, a 36.4% reduction; R&D expense ratio fell from 26.43% in Q1 to 5.83% in Q4. Marketing expenses also declined from 4.4 billion yuan in Q1 to 3.54 billion yuan in Q4, a nearly 20% decrease; marketing expense ratio dropped from 36.58% to 10.22%.

Since Q3 2022, NIO has maintained an R&D investment intensity of around 3 billion yuan per quarter.

In addition to management cost reductions, the declining prices of lithium carbonate and self-developed chips have also lowered NIO’s per-vehicle BOM costs. Data indicates that NIO’s vehicle cost decreased from 230,200 yuan in 2024 to 201,400 yuan in 2025. “Our self-developed Shenji NX9031 chip has computing power equivalent to four industry-leading chips, reducing costs by over 10,000 yuan per vehicle,” said Qin Lihong, President of NIO.

Reaffirming Annual Goals

During the Q4 and full-year 2025 earnings call, NIO’s management outlined future plans.

In Q1 2026, NIO expects to deliver between 80,000 and 83,000 vehicles, a year-over-year increase of 90.1% to 97.2%; revenue guidance is between 24.48 billion and 25.18 billion yuan, up 103.4% to 109.2%. CFO Qu Yu emphasized, “NIO aims to achieve non-GAAP full-year profitability in 2026.”

The full-year 2025 net loss was nearly 15 billion yuan.

Regarding the path to profitability, NIO will continue to focus on the high-end pure electric market. Li Bin revealed that three new models will be launched this year: the flagship SUV ES9 will debut in Q2; a new five-seat SUV based on the all-new ES8 platform will launch in Q3; and the Leado L80 will be introduced in Q2. “Together with the Leado L90 and the popular new ES8, these five large and mid-size SUVs will lay the foundation for sales growth throughout the year,” Li Bin said. “We are very confident in achieving 40% to 50% sales growth for the year.”

Based on this, Qu Yu expects the overall vehicle gross margin in Q1 2026 to remain at the Q4 2025 level. “Despite seasonal and policy impacts, the order backlog for ES8 and post-Lunar New Year orders are good, and ES8 deliveries constitute a high proportion of total deliveries in Q1. Larger vehicles have higher margins and better risk resistance, so we are confident in maintaining reasonable gross margins for the full year.” For the entire year, Qu Yu stated that the company will maintain quarterly R&D spending of 2 to 2.5 billion yuan, and will continue to improve R&D efficiency based on the CBU operating mechanism, avoiding ineffective investments and increasing output from the same input. The company will also dynamically adjust R&D pace and investment based on 2026 operational results and ROI mechanisms, ensuring key product and core technology investments to enhance long-term competitiveness.

Beyond core business, Li Bin said that in 2025, service and community business revenue exceeded 10 billion yuan, achieving profitability. He expects the profitability of these segments to further improve in 2026, even with the addition of 1,000 swap stations, making the target achievable.

Notably, the financial report mentions that as of December 31, 2025, NIO’s current liabilities totaled 78.58 billion yuan, exceeding current assets of 76.63 billion yuan. NIO stated that considering revenue growth, operational efficiency improvements, and bank credit limits, its existing funds are sufficient to support normal operations for the next twelve months.

“NIO’s goal of achieving full-year profitability remains uncertain, especially with high prices for storage chips and lithium carbonate, which will increase costs for automakers including NIO,” said the aforementioned financial expert. “The Q4 2025 profit was within expectations, but to prove its profitability, NIO needs to sustain profitability for more than two quarters.”