Over the past year, William Li has repeatedly emphasized that NIO must achieve a quarterly profit in Q4 2025. With just over 70 days remaining until the deadline, the countdown is on.
On October 20, according to a Chinese media outlet, at NIO’s routine internal meeting held last Friday, NIO Inc. CEO William Li shared his personal Vision Action Upgrade (VAU) for 2025 Q4.
Sprint to achieve Q4 profit target
At the meeting, Li reiterated that the Q4 profit target must be met, listing it as the top item in his personal VAU. He stressed, “This is the answer our entire team must deliver to prove our operational efficiency and management capability.”
To reach this target, Li outlined three primary actions: focusing on key vehicle marketing, ensuring supply chain stability and cost reduction, and delivering high-quality software updates on schedule.
He stressed that the fourth quarter should be dedicated to solid vehicle sales, implementing cost-cutting measures, and enhancing user experience.
Li highlighted that the all-new ES8 and ONVO L90 models have exceeded market expectations, with some ES8 production slots already booked until April next year. The company plans to increase ES8 production capacity to over 15,000 units per month in December.
Li also noted that, aside from the ONVO L60 facelift, no new vehicle launches are planned for the fourth quarter. He cautioned that the upcoming reduction in purchase tax in the first quarter of next year could lead to a decline in demand, making the fourth quarter a critical period for maximizing sales.
In addition to profitability, Li emphasized the importance of developing a three-year business plan for all employees and deepening the company’s CBU. He underscored that profitability should not rely solely on cost-cutting but should focus on improving efficiency, output, and return on investment.
As of the third quarter, NIO’s cumulative deliveries reached 872,785 units, including 762,176 under the NIO brand, 90,279 under the ONVO brand, and 20,330 under the Firefly brand.
Excerpt from William Li’s internal speech (edited)
Profit fundamentally comes from selling more cars, not just cutting costs.
Looking back at last quarter’s VAU, V1 focused on high-quality deliveries, and overall execution was quite solid. In Q3, we undertook a lot of work: the L90 and ES8 launches, multiple product events—many pushed to the limit. Every department worked hard, demonstrating the company’s overall combat capability.
In terms of user development and operational paradigms, Q3 also saw continued progress. The Leapmotor team improved overall order stability for the L90. For NIO, the new ES8 received strong market recognition, and under our new operational model, the conversion rate from preliminary orders to locked orders has improved significantly compared with before.
On battery swap infrastructure, the integration of 1,000 highway stations with the 318 swap route demonstrates to the entire industry our persistence and commitment to charging and battery-swap infrastructure.
V2 reflects our ongoing organizational transformation around creating user value. We achieved some results, and while Q3 loss reduction is still being finalized financially and details can’t be disclosed, it has laid a foundation for Q4 profitability.
Through adjustments in Q3, the company essentially capped Q4 expenses—including sales, R&D, and management costs. Q4 will be about selling cars steadily, implementing cost-reduction measures effectively, and improving the user experience.
The Q4 VAU is straightforward: V1 is achieving quarterly profitability. This is a test of our team’s operational efficiency and management capability, and it is something we must achieve. This isn’t for show; it is the cornerstone for sustainable long-term development.
There are three key actions to achieve this. First is sufficient delivery. Each model has different circumstances. For ES8, delivery is critical; every extra unit delivered slightly increases the probability of profit this year, so ES8’s focus is on ensuring delivery. Some models require expanding sales, such as increasing the sales volume of ET5, ET5T, EC6, and ES6 models.
Every car matters in Q4—each model must maximize sales. With Q1 next year seeing a planned reduction in purchase tax, this year-end is likely the demand peak, while next Q1 the industry may see a decline. Capturing sales now reduces next quarter’s operational pressure.
We also aim to deliver as much as possible in Q4 while reserving orders for Q1 next year, which helps ease next quarter’s pressure. ES8 orders placed now will be delivered by April next year, meaning Q1 production is already fully booked. Managing long waiting times and keeping orders active is crucial.
Q4 is a special quarter; every day counts. No room for slack—everyone must focus on their responsibilities, execute marketing effectively for each model, and sell every car well.
Second is the supply chain. Q4 supply is critical. Demand for the new ES8 has exceeded expectations, and December production is expected to exceed 15,000 units. Confidence is high.
Third is delivering high-quality software on schedule. Apart from the L60 facelift, no new models are launching in Q4, but software must be delivered reliably. This boosts user satisfaction, enhances product competitiveness, and increases brand visibility.
NIO’s assisted driving aims to reduce effort and accidents. On safety, we are industry-leading, with accident rates down at least 15% year-on-year. Recent interviews clarified much of our thinking.
If these three priorities are executed well, Q4 profitability is achievable. Everyone must align their thinking: unnecessary costs should be cut, but fundamentally, profit comes from selling more cars, not just reducing expenses. There is no room for “overharvesting.” With less than two and a half months left in Q4, urgency is essential.
Top-tier companies balance long-term goals with short-term execution. NIO must become such a company.
For V2, one of our key priorities this year is to begin formulating a three-year business plan. Two years ago, we created a two-year plan that essentially guided our operations over the past two years. This time, the process will be different: in Q4, while deepening the company-wide operational mechanism, each business line will develop its own three-year plan. This includes further refinement of the CBU assessment and incentive mechanisms.
V3 focuses on continuously strengthening our organizational and systemic capabilities. Last year, we outlined 15 core system capabilities, which form the underlying logic of our business model: Where does value creation come from? How do we improve efficiency? What is the fundamental reasoning behind our business logic?
Looking back, we’ve made some progress in enhancing these capabilities, but there is still room for improvement. Last year, our thinking was clear, but many of our actions this year were not executed aggressively enough.
Every step we take today is aimed at long-term competitiveness, yet short-term pressures often force us to compromise on the long-term. We need to develop the ability to balance long-term objectives with short-term execution. Our team must cultivate this skill.
A company that effectively aligns long-term vision with short-term execution is strong; one that focuses only on one side is vulnerable. Companies that look only long-term without managing short-term needs will fail, and those that focus solely on the short-term will lack sustainable growth. Cultivating this awareness is crucial.
So, what are system capabilities? They are the shared ways of working, the underlying logic guiding decision-making, and the mechanisms that ensure the organization operates according to the same principles.
Among the 15 capabilities, I will focus on a few key areas. First is the 18-month rolling demand forecast, which is critical. With strong new vehicle effects and an unpredictable market, accurately forecasting demand in the smart EV sector is extremely challenging. In discussions with other automotive leaders in Beijing, many agreed on the difficulty—but if we can achieve the most accurate forecasts in the industry, we will have a strong advantage. Poor forecasting could result in significant losses.
I will dedicate more time to these areas, without diminishing the importance of other capabilities. My personal goal is to participate in over 30 workshops and exchanges in Q4—averaging more than once every two days. These discussions are how system capabilities are collectively shaped and strengthened.
I have repeatedly emphasized that this year, we must emerge from the trough relying on our capabilities. Everyone should ask themselves: have I grown? Have I deepened my understanding of business fundamentals? Is my execution more effective? Have we formed methodologies and management tools to sustain systemic capabilities?
This also includes CBU. Some outside observers, and even internal colleagues, misunderstand CBU as a cost-cutting measure. Its true purpose is efficiency improvement. A company’s resources are not infinite; how they are allocated and prioritized matters. CBU ensures that every expenditure is deliberate, focused on value creation and return.
If we understand the relationship between investment and output, the company will never lack funds. If not, resources are wasted. Spending money does not guarantee results—misallocated investments can produce negative outcomes while wasting time and energy, with opportunity cost being the greatest cost.
With the right capabilities, even spending billions in R&D is fine. Without them, not a single dollar should be spent recklessly. Past mistakes in large companies often stemmed from internal budget battles rather than external value creation. We must quickly develop these abilities; otherwise, temporary ease will make us forget hard lessons.
Experiencing prolonged difficulties is beneficial—the memory of pain lasts longer. I want to clarify again: the CBU mechanism is not about controlling costs—it is about improving efficiency, output, and return.
In Q4, we must consolidate the past two years of organizational and systemic capability building into real, operationally embedded capabilities. This work doesn’t end in Q4—it must continue next year, the year after, and beyond, constantly refining and improving.
One observation I want to share: building organizational capability and overcoming inertia is often easier than changing individual behavior. Organizational goals are quantifiable and verifiable, enabling mutual supervision and reinforcement; individuals struggle more.
For example, daily exercise: if everyone relies solely on self-discipline, only about 5% would succeed. Our group PK mechanism of 8,000 steps daily for L1 employees ensured adherence—that is the power of a system.
We can be optimistic: building organizational and systemic capabilities has a higher chance of success than changing individual habits. With collective effort, we can strengthen NIO’s system capabilities, making the past two to three years of learning in the trough worthwhile and improving our resilience for future market fluctuations.
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