- Nio achieved a net profit of 282.7 million yuan ($40.4 million) in the fourth quarter, marking its first-ever quarterly profit since inception.
- Nio expects a slowdown in deliveries for the first quarter of 2026 due to fading subsidies and seasonal factors.
Nio Inc achieved its first quarterly profit since its inception in the fourth quarter of 2025, a historic financial turnaround primarily driven by record vehicle deliveries and robust market demand for high-margin models.
The Chinese electric vehicle (EV) maker reported a net income of 282.7 million yuan ($40.4 million) for the three months ended December 31, according to earnings report released on Tuesday.
The result stands in stark contrast to the massive net loss of 7.11 billion yuan recorded in the same period of 2024.
Excluding share-based compensation expenses, the company's adjusted non-GAAP net income reached 726.8 million yuan in the fourth quarter. This falls in line with the estimated range provided in a rare positive profit alert issued by the company last month.
Revenue for the fourth quarter surged 75.9% year-on-year to 34.65 billion yuan. Meanwhile, the company's overall gross margin expanded significantly to 17.5%, up from 11.7% in the fourth quarter of 2024.
The core driver behind this profitability milestone was the record-high delivery of 124,807 vehicles in the fourth quarter, representing a year-on-year increase of 71.70%.
The third-generation ES8, with a starting price exceeding 400,000 yuan and a gross margin of about 20%, played a pivotal role. The SUV delivered 39,697 units in the fourth quarter, accounting for 32% of the company's total deliveries during the period, according to data compiled by CnEVPost.
In addition to strong sales performance, aggressive cost-control measures paved the way for the fourth-quarter profit.
Driven by organizational optimization and reduced personnel costs, research and development expenses in the fourth quarter were slashed by 44.3% year-on-year to 2.03 billion yuan.
Selling, general and administrative expenses for the quarter also dropped 27.5% year-on-year to 3.54 billion yuan. This was primarily attributable to a decrease in personnel and related costs in marketing and other supporting functions.
However, following the strong fourth-quarter performance, Nio and its domestic peers are facing new industry headwinds as they enter 2026.
The company has set a guidance range of 80,000 to 83,000 vehicles for deliveries in the first quarter of 2026, representing an increase of about 90.1% to 97.2% compared to the same period in 2025.
Total revenue for the first quarter is projected to range between 24.48 billion yuan and 25.17 billion yuan, representing an increase of about 103.4% to 109.2% compared to the same period in 2025.
The guidance indicates that Nio expects to deliver between 32,021 and 35,021 vehicles in March, more than doubling from 15,039 units delivered during the same period last year. The company delivered 27,182 vehicles in January and 20,797 vehicles in February this year.
Nio's founder, chairman, and CEO William Li previously warned that the entire Chinese EV industry would face immense growth pressure in the first quarter as national stimulus policies fade.
Market demand in the first quarter has been severely impacted by the Chinese New Year holiday and the transition period for EV trade-in subsidies. Furthermore, the additional purchase tax costs faced by consumers have further dampened near-term buying sentiment.
Beyond demand-side pressures, rising prices for raw materials such as memory chips and metals could once again threaten automakers' profit margins.
As of the end of 2025, Nio's balance of cash and cash equivalents and other funds stood at 45.9 billion yuan.
Investors will be closely watching management's remarks during the earnings call, as well as the sustainability of its profitability in the face of macroeconomic challenges.
