After facing dual challenges of sustained massive losses and a user trust crisis, NIO Inc. CEO Li Bin has staked his entire reputation on a bold promise—achieving profitability in the fourth quarter of 2025.

On September 2, NIO Inc. disclosed its second quarter earnings report. The financial results showed that the company delivered 72,056 vehicles in Q2, representing a 71.2% quarter-over-quarter increase.

Despite a 26% sequential decrease, NIO Inc.'s net loss in Q2 remained substantial at 4.995 billion yuan (approximately $700 million), indicating the company still faces a significant gap before achieving true profitability.

According to public records, Shanghai NIO Automobile Co., Ltd. was established in 2015. As a former leader in the "NIO-XPeng-Li Auto" camp, this new energy vehicle manufacturer is currently at a critical stage of racing for survival, with market attention focused on whether it can meet its profitability targets on schedule.

**Q2 Loss Approaches $7 Billion, Automotive Gross Margin Declines Year-over-Year**

On September 2, NIO Inc. released its latest quarterly earnings report. In Q2 2024, the company delivered 72,056 vehicles, up 25.6% year-over-year and 71.2% quarter-over-quarter.

Alongside expanding delivery volumes, NIO Inc.'s revenue also grew synchronously. Q2 total revenue reached 19.009 billion yuan, up 9% year-over-year and 57.9% quarter-over-quarter.

Vehicle sales revenue was 16.136 billion yuan, up 2.9% year-over-year and 62.3% quarter-over-quarter.

Previously, Li Bin emphasized in late August internal communications that automotive industry competition ultimately comes down to operational efficiency and cost control capabilities. He required all employees to strengthen operational awareness and strictly implement the cost philosophy of "not spending a single penny that shouldn't be spent."

Currently, these control measures have shown some effectiveness in the latest financial report. Q2 operating expenses totaled 6.806 billion yuan, down 1.3% year-over-year and 7.2% quarter-over-quarter.

Benefiting from sales growth and comprehensive cost reduction measures, NIO Inc.'s Q2 net loss narrowed to 4.995 billion yuan, down 1% year-over-year and 26% quarter-over-quarter.

However, NIO Inc.'s Q2 automotive gross margin performance was less optimistic at only 10.3%, down 1.9 percentage points from 12.2% in the same period last year.

Simultaneously, Q2 average selling price per vehicle was approximately 223,900 yuan, down about 18.1% from 273,300 yuan in the same period last year.

The downward trend in NIO Inc.'s vehicle prices is closely related to increased sales from its Ledao and Firefly brands. The financial report shows that Q2 deliveries for Ledao and Firefly were 17,081 and 7,843 vehicles respectively, accounting for 23.7% and 10.9% of total sales.

Li Bin revealed that "Ledao L90 and the all-new NIO ES8 have received enthusiastic market response, further consolidating our overall sales growth momentum. Benefiting from this strong demand, we expect Q3 total deliveries to reach 87,000 to 91,000 units, up 40.7% to 47.1% year-over-year, setting a company record."

Analysts point out that Ledao and Firefly target the mass market with relatively affordable pricing strategies, creating clear positioning differentiation from the premium-focused NIO main brand.

However, while sales growth from these two brands has driven NIO Inc.'s product matrix penetration into broader downstream markets, it has also diluted the average selling price previously dominated by premium models.

**Customer Confronts Li Bin for 5 Minutes in "Soul-Searching" Questions**

While Li Bin was actively promoting cost reduction and efficiency improvement strategies, a user trust crisis also erupted.

On August 29, at a NIO Inc. user meeting, a longtime owner confronted Li Bin face-to-face for a full 5 minutes.

This customer posed five major "soul-searching" questions to Li Bin, primarily involving credit issues, maintenance issues, value retention issues, fulfillment issues, and communication channel issues.

For example, NIO Inc. concealing price reduction information during sales processes, first-generation models with 8155 chips not receiving long-awaited cabin updates, poor vehicle value retention rates, previously promised assisted driving functions not being delivered on schedule, and lack of effective direct communication channels.

Facing these customer concerns, Li Bin responded point by point: there was no intentional information concealment; early models faced significant hardware limitations making updates difficult, but safety-related functions would continue to be maintained; value retention rates were affected by rapid industry iteration, and NIO Inc. would strive to improve product competitiveness. He also reiterated that NIO Inc. has always been committed to maintaining smooth user feedback channels.

Despite Li Bin's responses to various user concerns, he still struggled to calm the anger of some longtime users whose tangible interests had been harmed.

The eruption of this trust crisis fundamentally stems from NIO Inc.'s failure to properly balance its relationship with user interests while directly confronting current operational pressures, further highlighting contradictions between the two.

Data shows that NIO Inc. has been in a loss-making state for years. From 2018 to 2025, NIO Inc.'s cumulative net loss attributable to shareholders has exceeded 100 billion yuan.

To survive and further open markets, NIO Inc. had to adopt price reduction strategies (such as a 30,000 yuan across-the-board price cut in June 2023, and over 80,000 yuan reduction in the all-new ES8 entry price in 2025) and adjust user benefits (such as canceling lifetime free battery swapping rights for some first-time owners in July 2025).

While these measures provided some short-term relief from NIO Inc.'s operational pressures, they also hurt the feelings and interests of some longtime users.

In fact, NIO Inc.'s current predicament is a microcosm of fierce competition in the entire new energy vehicle market. With Tesla entering China and initiating the "price war," manufacturers including NIO Inc. had to join this smokeless "war" to capture more market share.

Caught between the dilemma of cutting prices to maintain sales volume and offending longtime users, NIO Inc. ultimately chose to abandon price persistence and prioritize sales volume protection, leading to some longtime users' interests being compromised. In the rapidly iterating new energy vehicle field, finding the balance point between corporate profitability and user interests is an urgent problem NIO Inc. needs to solve.

**Setting Q4 Profitability Flag: Can Li Bin Achieve His Goal?**

Recently, Li Bin has publicly stated multiple times that NIO Inc. must achieve profitability in the fourth quarter.

In internal communications, he stated that when the Q4 profitability plan was proposed at the beginning of the year, those who believed it could be achieved were "probably less than 1%," but he still insists on maintaining this unchanged goal.

To achieve Q4 profitability targets, both NIO Inc.'s vehicle sales and gross margins must steadily rise. Facing limited production capacity, NIO Inc. made a strategic choice: prioritizing depth in core products over breadth in product lines.

Li Bin revealed that NIO Inc. currently has order backlogs for four vehicle models: L90, L60, all-new ES8, and Firefly, but production capacity must prioritize the all-new ES8 and Ledao L90. For instance, L60 has already yielded production capacity to L90.

NIO Inc. plans to increase L90 monthly production to 15,000 units in October, with all-new ES8 production capacity also rising to 15,000 units in December. The company is working full-speed to boost production capacity, aiming to achieve total deliveries of 150,000 units across three brands in Q4.

Meanwhile, to further improve automotive gross margins, NIO Inc. executives revealed during Q2 earnings calls that as the company completes subsequent product transitions with high-margin L90 and new ES8 deliveries beginning, overall vehicle gross margins will improve. The company aims to achieve break-even under Non-GAAP criteria in Q4.

NIO Inc.'s Q4 vehicle gross margin target is set between 16%-17%. Long-term, the company's comprehensive gross margin target is 20%.

Specifically, NIO Inc. brand gross margin target is 20%, striving toward 25%, Ledao brand gross margin target is above 15%, and Firefly brand gross margin target is around 10%.

However, NIO Inc. still faces multiple challenges in achieving Q4 profitability targets: not only must it drive monthly average deliveries from 30,000 to 50,000 units and achieve vehicle gross margin breakthroughs above 16%, but it also needs more effective control measures for R&D expenses, sales and general administrative expenses to further reduce expenditure scale.

In earlier internal company communications, Li Bin also admitted that achieving Q4 profitability targets would not be easy, but as the pure electric market enters an upward trajectory, the company now has conditions to convert ten years of technological accumulation into market competitiveness. Next, NIO Inc. will focus on improving sales, delivery, and operational efficiency.

Can the currently pressure-laden NIO Inc. successfully achieve Li Bin's Q4 profitability target? This remains to be seen.