- Li believes that sales are fundamental for the company as a whole.
- Li also highlighted cost reduction and cited profitability as the second keyword.
Nio (NYSE: NIO) founder, chairman, and CEO William Li emphasized the importance of volume and cost reductions in an internal meeting as the electric vehicle (EV) maker embraces 2025.
At a recent management-only internal meeting, Li mentioned three core visions -- doubling sales, striving for single-quarter profitability in the fourth quarter of 2025, and continuing to build systematic capabilities, according to a report in local media 21jingji today.
It was Nio's first quarterly meeting after celebrating its 10th anniversary and lasted an hour, according to the report.
It was the clearest Li has ever articulated the importance of sales, the report said, citing a Nio source.
Another Nio employee said Li used the words “very central” and “very important” several times during the meeting to express the importance of sales, and compared the company to competitors.
Li believes that sales are fundamental to achieving single quarter profitability at the end of the year, to competing, and to running a business, and that the entire company should be looking at sales as the only, core metric to measure the results of its work, according to the report.
He highlighted sales momentum in the initial six months of a new model's launch at the meeting.
With new cars on a fast refresh cycle, the gap between launch and delivery shouldn't be too long and word-of-mouth needs to be built as quickly as possible early in the launch, Li said, according to the report.
“However, Nio has previously not built a strong enough awareness of sales momentum in the first six months throughout new cars' lifecycles, and this is something that needs to change,” he said.
The Nio founder also stressed on cost reduction and made profitability the second keyword.
On the third-quarter 2024 earnings call, Li mentioned aiming for profitability in 2026, but he said internally that the company would aim for single-quarter profitability in the fourth quarter of 2025, according to 21jingji.
To achieve the profitability goal, Li believes the core is cost control, the report said.
With its current annual sales of 220,000 units, Nio can basically determine what are fixed expenses. If Nio still doesn't achieve profitability after doubling its sales, it's a sign that too much money is being spent, and it needs to be reviewed exactly how the money is being spent, he said.
Nio's new models this year will come with the SkyOS operating system, which will bring enhanced performance in addition to a significant reduction in royalty payments, according to a person close to Nio with knowledge of the matter, the report said.
In addition, the availability of Nio's in-house chip will also help reduce costs, the report noted.
The ET9, which is set to begin deliveries next month, is the first model to feature Nio's own 5 nm process-based Shenji NX9031 autonomous driving chip.
Last week, Li said in a live video that Nio would have new models or facelifts release every quarter this year starting in the second quarter that will feature Nio's in-house developed Shenji chip.
Nio is also trying to reduce its operating costs, setting up CBUs (Cell Business Units) in January, where each department has a separate cost checking center to go over what each department has spent, and is about to spend, on different projects, according to 21jingji.
Each department has its own ROI (return on investment) metrics, and the purpose of the CBU is to track how much return comes out of the costs paid and why the money is being spent, the report said, citing a Nio mid-level executive.
Each department needs to explain these matters clearly before spending money, the person said.
The CBUs are not physical organizations, and how exactly they will be implemented is still under discussion, the person added.
The CBUs are just one of the measures to control costs, and Li believes that another way to control the flow of money is to continue the "Cost Mining" initiative.
The "Cost Mining" initiative started at the beginning of 2024, when Li emphasized the need to avoid ineffective and inefficient inputs and reduce unnecessary expenditures, the report noted.
Compared to the targets set at the beginning of 2024, the "Cost Mining" initiative has largely met its goals, and exceeded them a bit, Li said in a media interview after the 2024 Nio Day, according to the report.
Nio to launch new models or facelifts every quarter from Q2 onwards, CEO says
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