NIO Internal Meeting: Entering Phase 3, Aims for Q4 Profitability

This morning, following the release of its Q1 2025 earnings report, NIO held a small-scale media briefing in Shanghai. Both NIO’s CEO, William Li, and President, Qin Lihong, attended the meeting.

During this media briefing, William Li reviewed the three phases of the company’s decade-long development, with a particular focus on the current strategic layout and future outlook for Phase 3. He stated that NIO has transitioned from a period of technological investment to a harvest phase, while simultaneously driving efficiency improvements through a company-wide operational transformation. The company is striving to achieve its profitability target in the fourth quarter.

Below is a summary of the key takeaways from this briefing.

A Decade in Three Phases

William Li outlined NIO’s development in three distinct phases.

Phase I (2015-2021): NIO established itself as a breakthrough premium brand, built its “chargeable, swappable, upgradable” Battery-as-a-Service (BaaS) energy ecosystem, launched iconic models like the ES8 and ES6, and achieved annual deliveries of 90,000 vehicles with positive operating cash flow by 2021.

Phase II (2022-2024): Despite falling short of operational targets due to internal and external challenges, NIO maintained strategic R&D and infrastructure investments. This included deploying 12 full-stack technologies and expanding its battery swap network.

Phase III (2025 onward): NIO is now commercializing its technological achievements – exemplified by the ET9 sedan featuring in-house developed components like the NX9031 chip and SkyRide Chassis. Concurrent management streamlining aims to reduce costs, targeting profitability in Q4.

Market validation emerged swiftly: The flagship ET9 delivered over 800 units in April, outselling the BMW 7 Series during the same period. This marks the first Chinese brand breaking foreign dominance in the executive flagship segment.

Core technologies are being deployed across models, including the Shenji computing platform, vehicle-wide operating system, and NIO World Model (NWM). A comprehensive ADAS upgrade for main models is scheduled by late June.

Multi-brand strategy shows early success: The mass-market brand ONVO’s L60 exceeded 6,000 monthly sales, while the subcompact firefly brand delivered 3,680 units in its first month – surpassing combined sales of MINI and smart EV models.

Management Transformation

NIO is implementing an “organization-wide transformation focused on user value creation.” Key initiatives include:

1. Refined Cost Control: R&D expenses reduced from RMB 3 billion to RMB 2-2.5 billion per quarter, prioritizing high-ROI projects.
2. Sales Force Optimization: ONVO sales personnel decreased by 40%, while sales volume increased by 42.8%, boosting per-capita efficiency through structural adjustments.
3. Supply Chain Integration: Cross-brand component standardization increased (e.g., tiered platform approach for seat systems), lowering costs.

Facing intensifying industry challenges, William Li emphasized that technological innovation and user experience are the core competitive differentiators, urging the industry to avoid a “race to the bottom.” Additionally, NIO will expand into lower-tier markets through its “County-by-County Power Swap Station Network” initiative and localized sales strategies to increase penetration beyond the Yangtze River Delta region.

For its 2025 outlook, NIO forecasts Q2 deliveries to hit a record high (72k-75k units), with its mass-market brand ONVO targeting monthly sales of 25k units by Q4. William Li stated: “Q1 was the trough; Q2 marks the start of our recovery trajectory, and we will fully achieve our operational targets in Q4.”