Nio swings to profit as premium SUVs, cost cuts drive turnaround

Chinese electric vehicle maker Nio has reported its first quarterly profit since launching operations, marking a major financial milestone after years of losses.

The company said Tuesday that strong demand for premium electric SUVs, record deliveries, and cost controls helped push the business into the black in the final quarter of 2025.

The result highlights how China’s EV competition is shifting from expansion to a phase focused on margins and operational efficiency.

For Nio, the profitable quarter suggests higher-end models and tighter spending are reshaping its financial profile.

Nio Q1 earnings: Record deliveries

Nio reported a net income of 282.7 million yuan for the three months ending December 31, reversing a net loss of 7.11 billion yuan recorded in the same quarter a year earlier.

Excluding share-based compensation expenses, adjusted non-GAAP net income reached 726.8 million yuan during the quarter. The result aligned with the profit alert issued last month.

Revenue rose sharply during the period. Fourth-quarter sales climbed 75.9% year on year to 34.65 billion yuan.

Overall gross margin reached 17.5%, compared with 11.7% in the fourth quarter of 2024.

ES8 drives sales

Vehicle deliveries played a central role in the turnaround.

Nio delivered 124,807 vehicles during the fourth quarter, representing a year-over-year increase of 71.70%.

A large portion came from the third-generation ES8. The flagship SUV starts at more than 400,000 yuan and carries a gross margin of about 20%.

During the quarter, 39,697 units of the ES8 were delivered. According to data compiled by CnEVPost, the model accounted for about 32% of Nio’s total deliveries.

The strong performance of high-margin vehicles helped improve earnings while supporting revenue growth.

Impact of cost discipline

Cost discipline also played a role in the quarterly profit.

Research and development spending dropped as the company streamlined operations. Fourth-quarter R&D expenses fell 44.3% year on year to 2.03 billion yuan.

Selling, general and administrative costs also declined. These expenses dropped 27.5% compared with the previous year to 3.54 billion yuan.

The reductions were driven by organisational optimisation and lower personnel costs across marketing and support functions.

2026 pressures

Despite the strong quarter, Nio and other domestic EV makers face new challenges entering 2026.

The company expects deliveries in the first quarter of 2026 to range between 80,000 and 83,000 vehicles, representing a year on year increase of about 90.1% to 97.2%.

Projected first-quarter revenue is estimated between 24.48 billion yuan and 25.17 billion yuan, implying growth of roughly 103.4% to 109.2% from the same period in 2025.

Nio expects March deliveries to range from 32,021 to 35,021 vehicles, compared with 15,039 units delivered in March last year.

The company delivered 27,182 vehicles in January and 20,797 vehicles in February.

Founder, chairman and chief executive William Li previously warned that the Chinese EV sector could face growth pressure in the first quarter as stimulus policies fade.

Demand has been affected by the Chinese New Year holiday and the transition period for EV trade-in subsidies. Additional purchase tax costs have also weighed on buying sentiment.

Rising prices for key materials, including memory chips and metals, could challenge automakers’ margins.

As of the end of 2025, Nio held 45.9 billion yuan in cash, cash equivalents and other funds.

Investors will be watching management remarks during the earnings call and the sustainability of profitability amid changing market conditions.