(March 11): Chinese electric-vehicle maker Nio Inc reported its first-ever quarterly profit, reaching a milestone that follows a decade of cash burn and lifting the company’s listed shares.
The Shanghai-based automaker on Tuesday reported profit from operations of 807.3 million yuan for the December quarter, marking a stark contrast to the six billion yuan loss recorded a year earlier.
The earnings beat sent Nio’s Hong Kong-listed shares surging around 15% in early trading Wednesday, tracking a similar rally in its American depositary receipts overnight.
The results provide much-needed validation for the company, whose high capital requirements and focus on the middle-class market have drawn repeated scepticism amid an increasingly shaky demand outlook. Lower fourth-quarter operating expenses came as a “pleasant surprise", Tim Hsiao, an analyst at Morgan Stanley, wrote in a research note.
Revenue climbed 76% to 34.65 billion yuan in the quarter, beating analyst estimates. Adjusted net profit reached 726.8 million yuan. Vehicle margins, a key barometer of production efficiency and pricing power, rose to 18.1% from 13.1% a year prior.
Nio’s widening of its target market with the mass-market Onvo brand and the compact Firefly line, alongside its popular premium brand, shows the company’s progress toward the scale required to make its business model sustainable.
See also: Geely profit beats estimates as sales approach those of BYD
“The competitiveness of our products across three brands was widely recognised within their respective market segments,” CEO William Li said in the earnings statement. “We will continue to invest decisively in our twelve full-stack core technologies, launch new models, enhance the commercial and operational capabilities of our battery swapping and charging network, and continue upgrading our sales and service network.”
The quarter was underpinned by record deliveries of 124,807 vehicles, up more than 70% from a year earlier as sales of the Onvo L60 and L90 sport utility vehicles surged. While the core Nio brand mainly sells at a premium price point of above 300,000 yuan, the sub-brands allow the company to compete more aggressively in the 100,000 yuan to 250,000 yuan segment, the most contested part of the Chinese market.
Nio expects to deliver up to 83,000 vehicles in the current period, which would almost double its deliveries from the first three months of 2025.
See also: Audi expects new SUV models, cost savings to boost 2026 profits
Still, Nio’s milestone quarter and upbeat forecast come alongside increasing uncertainty for the industry. China’s EV market is slowing as the rollback of some subsidies hurts demand and domestic competition from tech-heavy entrants like Xiaomi Corp and Huawei Technologies Co-backed ventures is intensifying. Meanwhile, trade barriers in the EU and the US have forced Nio to pivot toward a distributor-led model in international markets to preserve cash.
Nio’s reliance on battery swapping as a primary competitive advantage is also facing a fresh challenge from BYD Co, which last week unveiled the latest iteration of its flash-charging technologies and blade battery upgrades. The ultra-fast charging of BYD’s battery puts it almost on par with the speed of battery swapping — putting pressure on Nio to prove it can still offer a superior experience.
Nio has established over 3,700 battery-swap stations, each costing millions of yuan, and plans to add 1,000 more in 2026. The automaker is looking to hit over 10,000 swap stations by 2030.
Uploaded by Arion Yeow
