NIO Inc. reported record Q3 deliveries and revenue, narrowing net loss while aiming for profitability in Q4.
NIO Inc. released its third-quarter financial results yesterday afternoon.
Boosted by strong sales of the ONVO L90 and a surprise rebound from the entry-level firefly brand, NIO delivered a record-high quarterly volume.
In addition to the 87,071 vehicles delivered, total revenue reached RMB 21.794 billion ($3.01 billion), marking a new all-time high.
Automotive gross margin climbed to 14.7% and overall gross margin to 13.9%, both the strongest in the past three years.
Deliveries remain the foundation of any automaker, and after setting a new record, NIO’s financial indicators also improved quarter-over-quarter.
Net loss narrowed to RMB 3.48 billion ($481 million) in Q3, while non-GAAP adjusted net loss came in at RMB 2.735 billion ($378 million), shrinking more than 30% both sequentially and year-on-year.
Looking ahead, NIO guided for fourth-quarter deliveries of 120,000–125,000 vehicles, or more than 40,000 per month, a sequential increase approaching 50% and nearly doubling year-over-year.
At last night’s earnings call, CEO William Li reiterated NIO’s targets for Q4: achieving break-even profitability, lifting automotive gross margin to 18%, and reducing general expenses to 12% of cost of sales.
Li also outlined product plans, technology deployment, and the authorization roadmap for the Shenji chip platform as NIO approaches the end of 2025.
Is NIO only one step away from turning profitable? With China’s NEV purchase tax benefits beginning to phase out next year, how will the company respond?
Here is Li speaking on NIO’s 11th anniversary night—with confidence.
Profitability goal unchanged
“We remain confident in achieving profitability in the fourth quarter,” Li said in response to the first question on the earnings call.
Profitability relies on three levers: higher margins, greater scale, and lower spending. Li delivered a clear framework for all three.
On margins:
The L90 and ES8 have become top sellers among large three-row SUVs in their respective price brackets, helping NIO deliver its highest vehicle margins in three years.
Li said the 14.7% figure exceeded internal expectations. For Q4, based on discussions with partners, NIO expects vehicle margins to reach around 18%.
Revenue guidance of RMB 33 billion ($4.56 billion), paired with the 18% automotive margin target, sets up the most financially significant quarter of 2025 for NIO.
He added that ES8 deliveries will ramp sharply throughout Q4 and are expected to exceed 20% gross margin on a per-unit basis, supporting the overall improvement.
Following the model’s launch, Li pledged to deliver 40,000 ES8s this year, most of which will come in Q4—meaning November and December will be peak push months.
Meanwhile, the current ET5, ET5T, ES6, and EC6 models held gross margins in the 15–20% band, and the L90 is also tracking steadily within this range.
On tax incentive phase-out:
Li acknowledged that the decline in purchase-tax subsidies brings some pressure but said it has not materially impacted margins. User and market sentiment will absorb much of the effect next year.
Combined with supply-chain optimization, Li aims to reach 20% overall margin in 2025, though he cautioned that Q1 next year—historically a slow season—will inevitably see adjustments in volume and profit.
On scale:
Li noted that market volatility and subsidy policies affected some models with longer sales cycles, including newly launched ones, and therefore NIO maintained guidance above 40,000 per month rather than the previously discussed 50,000.
However, for a premium pure-EV maker priced mostly above RMB 300,000 ($41,480), sustaining 40,000 per month remains an exceptional benchmark.
The BaaS battery-subscription system also offers pricing advantages on tax basis calculations, softening the subsidy impact for BaaS users.
Li remains confident that with improved marketing efficiency and new models, NIO is positioned to hit 50,000 deliveries “in a certain month” next year.
On cost control:
With rising deliveries, NIO has seen meaningful supply-chain cost reductions. R&D spending will stay near RMB 2 billion ($276 million) per quarter, though efficiency improvements under the CBU structure are expected to increase output per yuan.
SG&A expenses, originally targeted to fall from 40% of sales cost to around 10%, reached roughly 23% in Q2 and remained flat in Q3. The company aims to reduce this to around 12% in Q4.
Using Q3 cost-of-sales of RMB 18.8 billion ($2.60 billion) as reference, the decline could free more than RMB 2 billion ($276 million) in expense room—one of the core confidence drivers behind profitability.
NIO sees structural advantage in pure-EV transition
If Q4 is about scaling efficiency, what will NIO look like in 2026?
New products will play a central role.
Li revealed that NIO will launch two new models in Q2 2026 and another in Q3—all large vehicles.
Rumors suggest possibilities including ES9, ES7 and L80, though he did not confirm details.
Li highlighted a market shift: the share of large pure electric SUVs is rising rapidly.
He noted that China’s NEV penetration reached 55% in Q3, with pure EVs growing 26% year-on-year, while range-extender and PHEV categories declined.
In the RMB 300,000+ market, pure-EV penetration rose from 12% last year to a record 18% in Q3. Across the first three quarters, pure EV sales grew 33%, while range-extender sales fell 10%.
He emphasized that pure EVs ranked No.1 in large three-row SUV sales in September and again in October.
Combined with new large-EV launches, NIO will have five pure-EV three-row models in market next year.
“Our portfolio is aligned with market direction,” Li said.
He also confirmed that NIO is developing a sub-RMB-200,000 ($27,650) vehicle platform. “The RMB 100,000–300,000 segment is a 15-million-unit market. There is no reason not to compete there.”
Shenji chip commercialization
Finally, the future of the Shenji AI chip also drew attention.
NIO confirmed plans for external sales and licensing of the Shenji NX9031.
Li said that for strategic partners, it is natural to supply the chip directly. For others, distribution through partners or non-automotive channels—such as robotics—may be feasible.
The NX9031 currently offers the highest known memory bandwidth among mass-produced automotive AI chips at 546 GB/s, critical for large-model inference and throughput.
NIO also said its CBU strategy applies to AI: achieving equivalent performance with lower compute requirements versus rivals.
This quarter, NIO will update its world-model system and support both Shenji and Nvidia Orin X. The ONVO OSD 2.1.0 version will also upgrade end-to-end capabilities.
Two simultaneous battles—software and hardware—will define NIO’s 2025.
Whether Li’s confidence converts into product experience, sales momentum and financial results?
The answer arrives in just three months.
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