Carrying a debt of hundreds of billions! But fortunately, the "worst" Li Bin has finally started making money

9 billion “Snake Swallows Elephant,” cashing out 700 million this year

Annual profit of 72.2 billion, the “terrifying” CATL

Source | Deep Blue Finance

Written by | Yang Bo

On the evening of March 10, the “worst” new force, NIO (09866.HK), finally reached a historic milestone—achieving its first quarterly profit in Q4 2025. This delayed quarterly earnings report allowed NIO Chairman Li Bin, who has been talking about profitability for years, to finally fulfill his promise.

However, under the spotlight, hidden concerns are also prominent. First, the full-year net loss remains high at 14.9426 billion yuan. Second, by the end of 2025, NIO’s total liabilities have surpassed 100 billion yuan, with the debt-to-asset ratio just 0.2% shy of 90%, putting enormous pressure on debt repayment. Additionally, NIO’s proud “battery swap model” faced a challenge early in the year from fast-charging technology.

From a sales structure perspective, NIO’s “turnaround” seems more like a last-ditch effort with the ES8’s cost-performance advantage. Therefore, 2025 remains a critical year full of challenges for NIO and Li Bin, with no room for retreat.

1

How substantial is the quarterly profit?

NIO’s financial report shows that in Q4 2025, the company achieved a net profit of 282.7 million yuan, marking its first quarterly profit since listing. The net profit attributable to NIO common shareholders was 122.4 million yuan, also a first since listing. Total revenue in Q4 reached 34.6502 billion yuan, a year-on-year increase of 75.9%.

Specifically, in Q4 2025, NIO delivered 124,807 vehicles, up 71.7% year-over-year and 43.3% quarter-over-quarter. Among them, NIO brand delivered 67,433 vehicles, Lido brand 38,290, and Firefly brand 19,084, with the three brands working together to drive a sales peak.

Looking at the full year, NIO still posted a net loss of 14.9426 billion yuan, narrowing by 33.3% compared to the previous year; total annual revenue was 87.4875 billion yuan, up 33.1% year-over-year.

Notably, revenue in Q4 accounted for 40% of the full-year total, becoming a key driver of annual performance. The sharp surge in Q4 results was due to multiple factors working together.

NIO’s gross profit margin in Q4 2025 reached 17.5%, up 5.8 percentage points year-over-year. The company stated this was mainly due to a significant increase in sales, optimized product mix, and cost reduction measures—higher sales diluted fixed costs and manufacturing expenses per vehicle, laying a foundation for profitability.

In reality, NIO’s core profit support comes from the continued strong sales of its high-end NIO ES8, which directly boosted the company’s overall gross margin.

According to posters released by NIO, the ES8 has ranked first in sales among large SUVs over 400,000 yuan for three consecutive months. Its “hot sales” are not accidental, mainly due to three advantages:

First, cost-performance ratio. The first-generation ES8 was priced at 548,000 yuan, the second-generation at 498,000–598,000 yuan, and the 2026 model has a price drop to 406,800–446,800 yuan. If choosing the battery leasing plan, the price drops further to 298,800–338,800 yuan, significantly lowering the purchase barrier.

Second, size upgrade. The 2026 ES8 length increased to 5,280mm, with a wheelbase of 3,130mm, upgrading from a mid-large SUV to a large SUV, directly competing with models like the Wey M9 and Li L9, with more competitive pricing.

Third, technological and configuration upgrades. The new model features a 900V high-voltage platform, with further optimized assisted driving systems. It also includes practical and “emotional” features like projection light blankets, welcome light blankets, and door panel ground lights. Plus, with NIO’s unique battery swap mode, this vehicle has gained market recognition.

Additionally, after the Lido brand’s L90 launched in Q4, sales remained steady, and the Firefly small car, previously underestimated, also performed unexpectedly well, contributing to NIO’s growth and giving Li Bin some relief.

Profit contributions from non-vehicle businesses are also steadily increasing. In Q4, NIO’s other sales gross margin reached 11.9%, maintaining profitability for three consecutive quarters, gradually forming multiple profit centers combining “vehicle sales + diversified services,” enriching revenue sources.

It’s worth noting that cost control on expenses has become an important part of NIO’s profit strategy.

The financial report shows that R&D expenses in Q4 were 2.026 billion yuan, down 44.3% year-over-year, mainly due to organizational optimization (everyone understands this, right?); selling, general, and administrative expenses were 3.537 billion yuan, down 27.5% year-over-year. These two core expense categories saved over 2 billion yuan compared to last year. As a result, some market voices suggest NIO might have manipulated expenses to meet the “Q4 profit” promise.

Overall, NIO’s ability to achieve quarterly profit is the result of multiple factors such as sales, product mix, and expense management. It’s a milestone but also somewhat temporary.

Entering 2026, NIO’s momentum remains strong. In Q1, NIO provided delivery guidance of 80,000–83,000 units, a year-over-year increase of 90.1%–97.2%; revenue guidance is 24.48–25.18 billion yuan, up 103.4%–109.2%. However, behind these impressive targets, the Lido and Firefly brands have slowed down, still mainly relying on the NIO ES8 to drive growth.

In the generally sluggish first quarter car market, such performance received positive feedback from the capital market—on March 11, NIO’s stock price surged, rising as much as 19%; by the close, NIO’s Hong Kong shares jumped 14.05%, with market value climbing to HKD 107.6 billion.

2

Sky-high incentives, Li Bin learning from Musk and He Xiaopeng?

On the same day as the earnings announcement, NIO unveiled a sky-high equity incentive plan, further tying Chairman and CEO Li Bin’s interests to company performance.

According to the plan, 248 million restricted shares are divided into ten equal tranches, with vesting conditions closely linked to NIO’s market cap and net profit:

Specifically, when NIO’s US stock market cap exceeds $30 billion, $50 billion, $80 billion, $100 billion, and $120 billion, one-tenth of the shares will vest each time. When net profit exceeds $1.5 billion, $2.5 billion, $4 billion, $5 billion, and $6 billion, respectively, another one-tenth will vest. When the market cap surpasses $120 billion and net profit exceeds $6 billion, all incentives will be fully vested.

This means that over a 12-year period, Li Bin may unlock only part of the shares or none at all.

Based on NIO’s market cap of about $12.2 billion on March 9, reaching the highest goal would require nearly a tenfold increase. This is a highly challenging target, demonstrating determination to investors but also leaving Li Bin with no room to retreat.

In fact, such “sky-high” stock incentives have become common among automakers to bind key managers and promote long-term development—NIO is not an exception.

On September 5, 2025, Tesla’s board announced plans to grant Elon Musk about 12% of the company’s shares, worth approximately $1.03 trillion, with more stringent conditions, including reaching a market cap of $85 trillion (currently about $1 trillion), nearly an 8-fold increase; delivering 20 million Tesla vehicles, 10 million active FSD subscriptions, 1 million robots, 1 million Robotaxi operations, and achieving an adjusted EBITDA of up to $400 billion. Since the announcement, Tesla’s stock has risen about 13%.

On March 19, 2025, Xpeng Motors announced granting He Xiaopeng 28.56 million shares, with vesting tied directly to stock price: one-third each if the stock hits HKD 250, HKD 500, and HKD 750 for 30 consecutive trading days, valid for ten years. At the time, Xpeng’s stock was HKD 89.55, so to get full incentives, the stock price must increase 7.4 times. If achieved, the incentive would be worth up to HKD 14.25 billion. But since then, Xpeng’s latest stock price is about HKD 75, down roughly 16% from the grant date.

Thus, whether Musk or He Xiaopeng, setting a huge distant goal alone cannot directly drive stock prices higher; real sales figures are still the key.

3

Liability exceeds 100 billion, no retreat for NIO

It is reported that in 2026, NIO will launch three new models: the flagship SUV ES9, Lido L80, and a large five-seat SUV based on the new ES8 platform. By then, NIO will have five large vehicles on sale, potentially further increasing overall gross margin and supporting sustained profitability.

Li Bin also expressed strong confidence in a 40–50% sales growth this year.

However, an unexpected disruptive event at the start of the year caused concern. On March 5, BYD launched its second-generation blade battery + fast-charging mode, which can achieve “over half charged in 5 minutes, full in 9 minutes, and only 3 extra minutes at -30°C.” After the release of fast-charging tech, many online discussions questioned whether Li Bin’s “house of cards” was collapsing. Will fast-charging become the biggest competitor to battery swapping? Will NIO face a huge impact?

It is known that battery swapping has long been regarded by NIO and its shareholders as the company’s core “moat.” To date, NIO has built 3,815 swap stations worldwide, over 28,000 supercharging and destination charging piles, with nearly 20 billion yuan invested. By 2030, the plan is to have over 10,000 charging and swapping stations.

Regarding the controversy between fast-charging and swapping, Li Bin recently responded, saying that ultra-fast charging and battery swapping are not contradictory but both aim to improve charging efficiency. Li Yunfei from BYD also responded, saying that both are “different paths to the same goal.”

What does that mean?

Actually, they mean that both battery swapping and fast-charging are fundamentally “efficiency revolutions” in energy replenishment, the ultimate solution to user anxiety. Under this logic, their common “enemy” is internal combustion engine vehicles, which also inadvertently hurt range extenders and plug-in hybrids. This is a positive development for the popularization of pure electric vehicles.

Of course, whether these views are correct remains to be seen over time.

It’s undeniable that as fast-charging technology reduces charging time gaps, the exclusive advantage of battery swapping in saving time has been greatly weakened; instead, its high construction and operation costs may continue to burden NIO.

Furthermore, since 2026, the prices of key raw materials for new energy vehicles have continued to rise. The price of lithium carbonate, a core material for batteries, soared from 75,000 yuan/ton at the start of 2025 to 174,000 yuan/ton in early 2026, directly increasing battery procurement costs. Meanwhile, automotive-grade storage chips have also seen continuous price hikes, further squeezing automakers’ margins due to capacity shortages in the AI computing industry.

More worrying is NIO’s debt problem, which has been a persistent controversy. According to financial data, over recent years, despite continuous revenue growth, total liabilities and debt ratios have soared. From 2020 to 2025:

NIO’s revenue increased from 16.258 billion yuan to 87.488 billion yuan;

Total liabilities surged from 22.78 billion yuan to 111.709 billion yuan;

Debt-to-asset ratio climbed from 41.69% to 89.8%, nearing 90%;

Meanwhile, shareholders’ equity shrank from 31.862 billion yuan to 12.693 billion yuan!

This means that since 2020, shareholders’ assets have been shrinking. Of NIO’s over 110 billion yuan in liabilities, accounts payable and notes amount to 53.31 billion yuan, half of total liabilities, mainly owed to suppliers. In June last year, NIO and many automakers promised to keep supply chain payment terms within 60 days, but details remain to be further disclosed.

With an asset-liability ratio close to 90%, NIO has little room for error or trial-and-error anymore!