NIO achieves quarterly profit for the first time in Q4 2025, Li Bin's bet "net profit of $6 billion over the next 12 years"

On the evening of March 10, NIO (NIO.US) released its financial report for the fourth quarter and the full year of 2025, presenting a key answer in the development journey of NIO: the company achieved its first quarterly profit in the fourth quarter of 2025, with an operating profit of 1.25 billion yuan and a revenue growth of 75.9% year-on-year. The full-year net loss still stood at 14.94 billion yuan, a year-on-year reduction of 39.4%.

In the face of industry challenges such as the impact of flash charging technology and rising raw material prices, NIO has clarified its development direction, focusing on the continuous layout of the battery swap network and the expansion of its chip business both internally and externally. At the same time, it announced an equity incentive plan for Li Bin, setting a growth tone for the new year.

First Quarterly Profit Achieved, Full-Year Loss Narrowed

In the fourth quarter of 2025, NIO’s total revenue was 34.65 billion yuan, a year-on-year increase of 75.9% and a quarter-on-quarter increase of 59%. The operating profit for the fourth quarter of 2025 was 1.25 billion yuan, marking the company’s first quarterly profit.

In the fourth quarter of 2025, NIO’s overall vehicle gross margin was 18.1%, an increase of 5 percentage points year-on-year and 3.4 percentage points quarter-on-quarter; the gross margin for other sales was 11.9%, an increase of 10.8 percentage points year-on-year and 4.1 percentage points quarter-on-quarter; the overall gross margin was 17.5%, an increase of 5.8 percentage points year-on-year and 3.6 percentage points quarter-on-quarter.

When asked about the core reason for the service business gross margin reaching 11.9% in the fourth quarter of 2025 during the earnings conference, NIO’s Chief Financial Officer (CFO) Qu Yu stated that the key reasons for the improvement in gross margin were the continuous increase in user retention and the ongoing enhancement of operational efficiency. The revenue from services and community-related businesses exceeded 10 billion yuan in 2025, and user retention is expected to continue to increase in 2026, leading to sustained growth in revenue and gross margin for this business. Although 1,000 new battery swap stations will be added in 2026, the operational losses will have a certain impact on gross margin, but this loss can be fully covered by the profits from the service business, indicating an overall positive trend.

Additionally, NIO’s founder, chairman, and CEO Li Bin stated that the service and community business of NIO has already achieved profitability in 2025, and even with the addition of 1,000 new battery swap stations in 2026, the profitability of this business will continue to improve.

In 2025, NIO’s total revenue for the year was 87.49 billion yuan, a year-on-year increase of 33.1%. Despite achieving its first profit in the fourth quarter, the company still recorded a net loss of 14.94 billion yuan for the entire year, a year-on-year reduction of 39.4%.

In terms of deliveries, NIO delivered 326,000 vehicles in 2025, a year-on-year increase of 46.9%.

Consolidating the Battery Swap Network, Promoting In-House Chip Commercialization

Recently, BYD (002594) (002594.SZ) announced its flash charging technology, achieving breakthroughs in charging time. Meanwhile, NIO has invested significantly in building battery swap stations. The external perception is that the release of flash charging technology poses a challenge to the battery swap system.

Li Bin mentioned during the earnings conference that flash charging and battery swapping are not contradictory. NIO has established over 28,000 supercharging and destination charging piles, making it one of the most proactive car manufacturers in the industry regarding charging pile layout, creating an energy supply system that is “chargeable, swappable, and upgradable,” meeting users’ energy replenishment needs in different scenarios. In the foreseeable future, fast charging speed and experience cannot be compared to battery swapping; battery swapping is a systemic solution to the mismatch between vehicle and battery life. Coupled with long-life battery design, charge and discharge strategies, and battery health monitoring, it can significantly enhance battery safety and extend battery life.

Moreover, NIO will continue to add 1,000 new battery swap stations annually in 2026. Currently, there are 3,815 battery swap stations globally, and the continuous layout of the battery swap network represents NIO’s long-term, unique, and hard-to-replicate core competitive advantage.

In terms of intelligence, NIO’s subsidiary chip company, Anhui Shenji Technology Co., Ltd. (hereinafter referred to as “Anhui Shenji”), recently completed its first round of equity financing, raising over 2.2 billion yuan, with a post-financing valuation nearing 10 billion yuan. Its “Shenji NX9031” has shipped over 150,000 units.

When asked about the mid-term strategy for the Shenji chip, Li Bin stated that in addition to developing the next generation of high-end chips, they will also develop mid-range chips to cover a broader customer base.

In terms of market layout, besides meeting NIO’s internal usage, they will actively expand to external customers, focusing on areas such as robotaxi and embodied intelligence. Currently, several car manufacturers and industry clients have shown interest in the Shenji chip, and preliminary progress has been made in external business expansion. Li Bin did not disclose specific vehicle coverage information for internal and external customers, stating that multiple industry customers are currently conducting preliminary testing and engagement with the chip.

Additionally, Anhui Shenji’s second vehicle-grade 5-nanometer process chip has successfully completed its first tape-out and is in the mass production stage. This chip’s performance is comparable to three NVIDIA Orin X chips, with a lower cost than the existing Shenji NX9031. It is suitable not only for autonomous driving but also for applications in embodied robotics, serving as an edge inference chip (not for training), with a wide range of applications.

Li Bin’s Bet, Challenges and Products in 2026

The expected delivery volume for the first quarter of 2026 is between 80,000 and 83,000 units, a year-on-year increase of 90.1% to 97.2%; revenue is expected to be between 24.48 billion yuan and 25.18 billion yuan, a year-on-year increase of 103.4% to 109.2%.

Additionally, NIO announced a long-term “bet agreement” with Li Bin, granting him approximately 248 million shares of restricted company stock.

It is understood that these restricted shares are divided into ten equal batches, with vesting conditions linked to specific performance targets related to the company’s market capitalization and net profit. This plan will take effect on March 6, 2026, and will last for twelve years. Notably, the aforementioned shares will only vest in batches after certain performance targets are met. These performance targets are directly related to the company’s market capitalization and net profit.

Specifically, when NIO’s market capitalization exceeds $30 billion, $50 billion, $80 billion, $100 billion, and $120 billion in succession, one-tenth of the aforementioned shares will vest to Li Bin at each milestone. When NIO’s net profit exceeds $1.5 billion, $2.5 billion, $4 billion, $5 billion, and $6 billion in succession, one-tenth of the aforementioned shares will also vest to Li Bin at each milestone. When the company’s market capitalization exceeds $120 billion while net profit exceeds $6 billion, this will trigger the final vesting of all incentive shares.

Analysts point out that the share unlocking conditions tied to the company’s market capitalization and net profit aim to combine clear and highly challenging long-term goals with direct shareholder returns and the company’s business growth and operational results. This deeply connects the CEO’s incentives with the company’s strategic goals, fully motivating the leadership to lead the company in achieving sustainable profit enhancement and value growth amid intense market competition, thereby maximizing the long-term interests of all shareholders.

In terms of product planning, in the second quarter of 2026, NIO will launch the ES9 and the Ledo L80, and in the third quarter, it will introduce a five-seat SUV based on the ES8 platform, while the Ledo L60 will undergo a facelift.

In 2026, the automotive industry is generally affected by the demand for AI computing power and geopolitical influences, with rising prices for chips, copper, lithium carbonate, and other raw materials, which will put significant pressure on NIO’s costs and gross margins.

Qu Yu stated that the company will not pass the cost onto consumers and will work with supply chain partners to collaboratively enhance supply chain efficiency to offset the negative impact of rising raw material prices to the greatest extent possible. At the same time, five high-end large SUVs will be on sale in 2026, which have higher gross margins and stronger cost risk resistance, capable of absorbing some cost pressures and ensuring that the overall gross margin remains at a reasonable level.