Li Bin fulfills his promise: NIO to achieve its first profit in Q4 2025

On February 5, 2026, NIO released its Q4 2025 earnings forecast, estimating an adjusted operating profit (non-GAAP, excluding stock-based compensation) of 700 million to 1.2 billion yuan. This marks the company’s first time achieving quarterly adjusted operating profit since its founding. In March 2025, NIO founder Li Bin made a pledge to turn a profit in the fourth quarter of that year, and now Li Bin’s promise has been fulfilled.

In Q4 2024, NIO still reported an adjusted operating loss of 5.5436 billion yuan. The dramatic turnaround from massive losses to profitability within a year not only indicates a substantial shift in NIO’s operational status but also, against the backdrop of ongoing industry price wars and cautious capital markets, provides a profitable path for new energy startups still “investing for scale.”

It is worth noting that after the profit forecast was announced, NIO’s stock prices in the US, Hong Kong, and Singapore markets all experienced varying degrees of increase.

Sales, Structure, and Cost Reduction: “Three Arrows”

Analyzing NIO’s earnings forecast shows that the company’s first quarterly adjusted profit was achieved through a combination of increased sales, improved product mix, and cost reduction and efficiency measures.

Data shows that in Q4 2025, NIO delivered a total of 124,807 new vehicles, setting a quarterly delivery record with a 71.7% year-over-year increase. Among these, NIO brand deliveries reached 67,433 units, up 27.8%; the Leado brand delivered 38,290 units, up 92.1%; and the Firefly brand delivered 19,084 units, a 52.8% increase quarter-over-quarter. All three brands hit record highs, further expanding product coverage from high-end to mass-market. On a monthly basis, December 2025 saw 48,135 deliveries, a 54.6% YoY increase, also a record high. Notably, NIO and Firefly brands have maintained growth for five consecutive months, providing strong support for quarterly volume growth and laying the foundation for improved profitability.

Driven by increased deliveries, NIO’s high-margin models also performed well. Previously, NIO CFO Qu Yu stated during the Q3 2025 earnings call that the gross margin of the NIO ES8 reached 20%, while the “5566” models and Leado L90 maintained gross margins between 15% and 20%. Main models priced at 206,900–255,900 yuan for Leado L60, 298,000–316,000 yuan for NIO ET5T, and 406,800–446,800 yuan for ES8 accounted for over half of annual sales. The continued volume increase of high-margin models effectively boosted overall profitability.

A Leado sales representative in Fengtai, Beijing, told Huaxia Times, “From our frontline perspective, the strong sales of L60 and L90 are very noticeable. Especially the L60, which has almost become a must-see model for many families choosing electric vehicles in the 200,000–250,000 yuan range. For example, NIO’s high standards in charging and swapping convenience, intelligent driving assistance, comfortable seats, and rich in-car entertainment are all points that matter most to these families, and the L60 delivers on all of them. Plus, the price makes customers feel it’s worth it, so sales go smoothly.”

To consolidate profitability and control costs, NIO CEO Li Bin said during the Q1 earnings call that the company would keep sales management expenses around 10% and R&D expenses between 6% and 7%. To achieve this, NIO launched the “Basic Operating Unit” management mechanism in March 2025, splitting operations into multiple independent units with clear input-output ratios and reward and punishment rules, thereby reducing ineffective spending at the management and operational levels and providing clearer direction for cost reduction and efficiency.

Further cost-cutting measures included developing the NX9031 autonomous driving chip in-house to replace four Nvidia Orin-X chips, reducing vehicle costs by about 10,000 yuan; increasing the component commonality of the NT3.0 platform; and lowering the aluminum content in the vehicle body to further reduce BOM costs. On the marketing and operational side, NIO did not hold a NIO Day event in Q4, which reduced large marketing and R&D expenditures, and optimized supply chain management and supplier systems to achieve more refined expense control.

Data shows that cost reduction effects are reflected in improved costs and gross margins. NIO’s Q3 2025 financial report indicated that vehicle gross margin increased to 14.7%, a significant 4.4 percentage points quarter-over-quarter; vehicle cost per unit decreased to 188,000 yuan, down 13,000 yuan from the previous quarter, laying the groundwork for profitability in Q4. According to the latest operational data, in Q4 2025, the sales management and R&D expense ratios approached their targets, with expenses continuing to shrink and profitability pressures significantly eased.

Industry analyst Zhou Yue told Huaxia Times, “As delivery volumes continue to grow, NIO’s scale effects are beginning to show, not only spreading out fixed costs like manufacturing and R&D but also increasing bargaining power in supply chain procurement, supporting cost control. Meanwhile, the product mix continues to improve, with higher proportions of high-margin models, further expanding profit margins.”

Rebuilding Market Confidence

Achieving quarterly adjusted profit for the first time is a milestone for NIO’s development. It not only signifies that NIO has officially bid farewell to long-term losses but also marks the beginning of a new cycle of scale growth and profit improvement.

For a long time, NIO has faced significant cash flow and profitability pressures due to heavy investments in R&D and building a battery swap network. The disclosure of this profit forecast will effectively ease market concerns about its operational sustainability and further boost investor confidence.

From the capital market response, after the profit forecast was announced, NIO’s stock prices in the US, Hong Kong, and Singapore markets all rose to varying degrees. Market sentiment has clearly improved, indirectly indicating that investors are beginning to reassess its profit prospects. More importantly, the emergence of profitability is not just a change in financial statements but also means NIO has greater flexibility in capital allocation. Whether continuing to invest in core technologies, advancing battery swap infrastructure, or accelerating overseas expansion, there will be more sufficient funding support.

NIO’s Q3 2025 financial report shows total assets of 112.044 billion yuan and total liabilities of 99.956 billion yuan. Although the overall debt level remains high, the recovery of profitability and cash flow improvements are expected to ease financial pressures and provide more stable long-term support. Meanwhile, this phased breakthrough also demonstrates that NIO’s path in the high-end smart electric vehicle market is feasible. Its combined model of vehicle sales plus energy services like battery swapping and charging is forming a revenue and user system distinct from traditional automakers, giving it a stronger ability to compete sustainably in a fierce market.

From an industry perspective, NIO’s profitability breakthrough offers important insights for the global smart electric vehicle industry, promoting a shift from “burning money for competition” to “high-quality development.” Currently, competition in the new energy vehicle sector is intensifying, with most companies still operating at a loss. Even industry leader Tesla experienced revenue and net profit declines in 2025. NIO’s ability to achieve quarterly profit in the high-end smart EV segment proves that sustainable profitability is possible in this market, providing a reference for peers like XPeng and Li Auto.

Industry analyst Zhou Yue believes that NIO’s profit breakthrough shows that new energy automakers are not only reliant on “price cuts for expansion” to survive. By optimizing product structure, enhancing cost control, and creating more differentiated business models, they can also chart a sustainable profit path.

“With further industry competition intensifying, this model may also encourage more automakers to gradually reduce reliance on price wars, shifting competition focus toward technological investment and operational efficiency, leading the market toward healthier competition,” Zhou Yue said.

(Source: Huaxia Times)