NIO Achieves First-Ever Quarterly Profit, Q4 2025 Operating Profit Expected to Reach RMB 700 Million to 1.2 Billion

NIO (NYSE:NIO) is expecting to achieve its first-ever quarterly operating profit in Q4 2025, with adjusted operating profit projected to range between RMB 700 million and RMB 1.2 billion. Even under stricter accounting standards, the profit is expected to be between RMB 200 million and RMB 700 million, demonstrating that the improvement in profitability is driven by operational optimization. This marks a significant turnaround compared to a loss of over RMB 5.5 billion in the same period last year, with a sequential improvement of approximately RMB 6.2 billion to RMB 6.7 billion. The company attributes this growth to higher sales, optimized product mix, and comprehensive cost-reduction measures. Following the announcement, NIO’s U.S. pre-market shares surged more than 11%.

After several years of high-investment expansion, NIO has reached a key turning point in its operations, with the company projecting its first-ever quarterly operating profit.

On February 5, NIO released preliminary Q4 2025 performance guidance, indicating that its non-GAAP adjusted operating profit is expected to reach between RMB 700 million and RMB 1.2 billion (approximately USD 100 million to USD 172 million). Following the profit forecast, NIO’s U.S. pre-market shares briefly jumped more than 11%, and are now up 8.56%.

Notably, even under more stringent GAAP accounting standards, the company expects to achieve operating profit of about RMB 200 million to RMB 700 million, highlighting that the improvement in profitability is due to substantial improvements in operational efficiency and cost structure, rather than relying solely on accounting adjustments.

Compared to the same period last year, NIO’s adjusted operating loss for Q4 2024 was as high as RMB 5.54 billion. This quarter, the company expects a sequential improvement in operating profit of around RMB 6.2 billion to RMB 6.7 billion, a significant change that further validates the reliability of its profitability turnaround. The company attributes this positive change to steady growth in sales, optimization of the high-margin product mix, and systematic cost-reduction initiatives.

Three Key Drivers: Sales, Gross Margin, and Cost Control

NIO’s profit turnaround is driven by three main operational drivers, which are also the core areas for the market to assess the sustainability of its profitability:

1. Sales Growth Unlocks Operational Leverage
   The company has clearly stated that sales will continue to grow in Q4 2025. For capital-intensive manufacturing industries, an increase in deliveries directly spreads fixed manufacturing costs and certain rigid expenses across more vehicles, which is the foundation for achieving break-even. Future financial reports will need to verify the sustainability of sales growth, the contribution structure of each brand (NIO/LEO/Firefly), and the extent of the scale effect.
2. Product Mix Optimization Improves Gross Margin
   The improvement in “automobile gross margin driven by favorable product mix” suggests that profit growth comes not only from scale expansion but also from a qualitative change in sales structure. The increased share of high-margin models, growth in optional feature revenue, or stabilization of the end-price system can significantly improve the profitability of each vehicle. The resilience and strength of this driver will be directly influenced by the competitive landscape of the industry and the company’s product cycle.
3. Cost Control and Expense Optimization
   Under the ongoing cost-reduction and efficiency-improvement framework, NIO is systematically solidifying its profit foundation through cost control and expense optimization. On one hand, the company is reducing the per-vehicle production cost structure by enhancing its bargaining power in raw material procurement, optimizing production processes, and improving supply chain collaboration efficiency. On the other hand, it is strictly controlling R&D, sales, and administrative expenses to ensure that the expense-to-revenue ratio continues to decrease.

If improvements in gross margin can align with effective reductions in expenses, it would indicate that the current profit recovery is based on sustainable operational improvements, rather than relying on short-term market fluctuations or accounting adjustments.