NIO Inc. released its financial results for the fourth quarter and the full year of 2025. The company achieved an operating profit of 1.25 billion yuan in Q4, marking its first quarterly profit. Cash reserves reached 45.9 billion yuan at the end of the quarter, increasing by nearly 10 billion yuan sequentially. For the first quarter of 2026, the delivery guidance is set between 80,000 and 83,000 vehicles, representing a year-over-year growth of 90.1% to 97.2%. Revenue is projected to be between 24.48 billion and 25.18 billion yuan, an increase of 103.4% to 109.2% compared to the same period last year.
Following the earnings release, Founder, Chairman, and CEO William Li and CFO Steven Feng attended a conference call to discuss the results and answer questions from analysts.
Here are excerpts from the analyst Q&A session:
A Morgan Stanley analyst had two questions. The first concerned product plans and sales growth targets for the second half of the year, specifically asking about new model launches. The second question was whether NIO still aims for 40% to 50% annual sales growth in 2026.
William Li responded that while the overall passenger vehicle market in China might see a slight decline in 2026, Battery Electric Vehicle (BEV) penetration is expected to continue rising rapidly, especially in the premium segment. He expressed confidence in achieving the 40% to 50% sales growth target, citing a strong product pipeline. This includes the new NIO ES9 flagship SUV launching in Q2, a large five-seat SUV based on the ES8 platform in Q3, and the ONVO L80 in Q2. Combined with the existing ONVO L90 and the new ES8, this gives NIO five large SUV models, forming a comprehensive portfolio in the premium large SUV segment. He also noted strong, stable demand for models like the ET5, ET5T, ES6, and EC6, and a rapid demand recovery post-Chinese New Year for the Firefly brand.
The analyst's second question focused on autonomous driving, specifically feedback on the NIO World Model and NIO's key technological differentiators in the competitive L3/L4 landscape.
Li stated that key metrics for evaluating advanced driver-assistance systems are the proportion of driving time users actively use the system and its contribution to accident reduction. He highlighted that usage time for the NIO World Model grew over 80% month-over-month in February. He expressed confidence in the technology's potential, noting that more computational power will be allocated to data training in 2026, with two major version updates planned for Q2 and Q4.
A Deutsche Bank analyst inquired about the Q1 gross margin guidance amidst cost pressures and a recent subsidy on the ES8, and also asked about the growing receivables from related parties, primarily linked to the battery swap business.
CFO Steven Feng stated that the company expects Q1 gross margin and vehicle margin to remain at Q4 2025 levels. While cost pressures from materials like memory and lithium carbonate are emerging, their initial impact in Q1 is believed to be manageable. Regarding receivables, Feng explained that the increase is tied to NIO's battery asset company, Weilai Energy (Wei Neng), and correlates with rising BaaS penetration and overall sales. He noted that Wei Neng has made progress in financing and that repayment situations are under control.
A UBS analyst followed up on cost pressures, asking if NIO could pass some costs to consumers, given its strong positioning in the premium market.
Feng acknowledged significant cost pressures in 2026 from chips and raw materials due to AI demand and geopolitical factors. He stated the full-year impact is not yet entirely clear. The strategy involves working with the supply chain to improve efficiency. He emphasized that the higher proportion of large, higher-margin SUVs in the sales mix would help absorb cost risks and maintain a reasonable full-year gross margin.
The analyst's second question was about operating expenses, specifically whether the reduced R&D spending level of around 2 billion yuan per quarter seen in Q4 would become the new norm.
Feng confirmed that R&D investment is expected to remain in the range of 2.0 to 2.5 billion yuan per quarter in 2026, roughly similar to the full-year 2025 level. The focus will be on improving R&D efficiency through the CBU mechanism and adjusting investments dynamically based on ROI.
A J.P. Morgan analyst asked about future profitability, specifically the possibility of breaking even or achieving profit on a non-GAAP basis in H2 2026, and the implications for free cash flow.
Feng reiterated the 40%-50% sales growth target for 2026, supported by new large SUV models. He expressed confidence in achieving full-year operating profit on a non-GAAP basis, citing the strong margin performance and risk resilience of large vehicles like the ES8, which had a margin exceeding 20%, nearing 25%, in Q4.
The analyst's second question concerned NIO's in-house chip subsidiary, NXJ, and its strategy following a recent funding round, including potential collaboration with external OEMs.
Li said that NXJ has completed its first round of equity financing, receiving strong recognition from investors. Beyond developing next-generation chips, NIO will also develop products for mid-range chips to serve more customers and explore opportunities in areas like Robotaxi. He noted significant interest from external automakers and confirmed that the second-generation chip, which offers performance equivalent to three NVIDIA Orin X chips at a lower cost than the first-generation NX9031, has completed tape-out and is entering mass production. It is suitable for autonomous driving and robotics applications.
A CICC analyst asked about the upcoming NIO ES9 model, its technological advancements compared to the ET9, and its pricing.
Li clarified the positioning: the ET9 is the executive flagship sedan, while the ES9 is the tech executive flagship SUV. Many advanced technologies from the ET9 will be featured in the ES9, which will also have its own innovations.
The analyst's second question addressed the battery swap model's advantages and necessity in the context of advancing fast-charging technology, and NIO's infrastructure plans.
Li welcomed more automakers participating in charging and swap network construction, believing it boosts BEV adoption. He stated that charging and battery swapping are not contradictory but complementary, serving different user needs and scenarios under NIO's "chargeable, swappable, upgradable" system. He argued that even the fastest charging cannot match the speed and experience of battery swapping in the foreseeable future. Furthermore, he highlighted that swapping systematically addresses the issue of differing lifespans between the vehicle and its battery. He also emphasized the role of swap stations as distributed energy storage facilities, which can participate in grid interactions and offer higher operational economics compared to standard storage-charging setups, presenting significant commercial value. With nearly 3,800 stations currently, NIO's swap network represents a substantial storage capacity, and its continued expansion is a core long-term business that provides a competitive advantage.
A Bank of America Securities analyst asked for details on the second-generation chip's development focus—whether on autonomous driving, humanoid robots, or smart cockpit chips—and the potential cost savings from using in-house chips.
Li said the second-gen chip, built on an automotive-grade 5nm process, offers high cost-performance and has broad applications in autonomous driving and robotics. He could not disclose specific customer models but confirmed strong interest and ongoing testing with industry clients.
The analyst's second question was about the service business, specifically if the 11.9% gross margin for service revenue in Q4 indicates improvement as the swap network scales, and the outlook for 2026.
Feng stated that other businesses, including services and community income, exceeded 10 billion yuan in revenue for 2025. As the user base grows in 2026, he expects this revenue to increase and continue contributing positive gross margin. Regarding the swap business, while the planned addition of about 1,000 stations per year will incur losses, the overall profit from other service businesses is expected to cover these, presenting a controllable and positive trend. Li added that the service and community business was profitable in 2025, and profitability is expected to improve further in 2026, even with the expanded swap station investment.
An HSBC analyst asked for more details on SG&A expense optimization and a benchmark level, following the discussion on R&D.
Feng said that with increased sales and revenue, coupled with efficiency gains from the CBU and ROI mechanisms, SG&A expenses reached a reasonable level in Q4 2025. While the absolute amount of SG&A will increase with higher sales volume in 2026, the goal is to keep it below 10% of total revenue.
The analyst's second question requested a breakdown of sales and margin structures across NIO's three sub-brands and five core large SUVs.
Feng said it is difficult to precisely forecast the sales mix for individual models in a dynamic market. However, the five large SUVs are expected to constitute a high proportion of total sales. The Firefly brand has seen a rapid sales recovery post-holiday. Regarding margins, while facing significant cost pressures, the company aims for each brand to improve its margin, with long-term targets of 20%-25% for NIO, over 15% for ONVO, and over 10% for Firefly. He emphasized that since 2025, management has shifted focus from pure volume to "quality growth," seeking a balance between volume, profit, and operating results, a change facilitated by the CBU mechanism that has already shown positive results.