NIO’s William Li says there is no plan B for Q4 profitability

CEO’s profit commitment after Q3 earnings

Nio CEO William Li emphasized the focus on Q4 profitability during a media briefing at the Shanghai headquarters on Tuesday, November 25, 2025. He stated there was “no plan B” for achieving the target, responding to questions about the company’s financial health.

Nio aims for a vehicle-level gross margin of approximately 18% in the fourth quarter. This goal is heavily supported by high-margin models, with the newest ES8 SUV specifically projected to achieve a margin of over 20 %. This strong push for efficiency is the foundation of their strategy to prove operational strength.

Record-high vehicle deliveries drive growth

This focus on efficiency is linked directly to strong sales figures. The company delivered a record total of 87,071 vehicles in the third quarter of 2025, which ended on Tuesday, September 30, 2025. This delivery figure showed a substantial 40.8% increase compared to the same three months in the previous year.

NIO reported a quarterly record of 87,071 deliveries in Q3-2025. Management highlighted growth across the NIO, ONVO, and Firefly brands. The overall total revenue reached an all-time high of 21.79 billion Chinese Yuan, underscoring renewed momentum in the core electric vehicle business.

Delivery guidance sets an aggressive target

To sustain this growth, Nio has set an ambitious target for vehicle deliveries in the fourth quarter, aiming for a range of 120,000 to 125,000 smart electric vehicles. This guidance implies a significant year-over-year increase of 65.1% to 72.0% over the fourth quarter of 2024.

The revenue is similarly forecast to rise, estimated between 32.76 billion Chinese Yuan and 34.04 billion Chinese Yuan for Q4. In October 2025, the new ES8 delivered approximately 6,700 units, while the ET5 family added roughly 5,900 units, underscoring a shift in the mix toward higher-margin models.

Margin improvement from vehicle cost optimization

The aggressive delivery goal is paired with cost-cutting to achieve profits. The vehicle gross margin improved to 14.7 % in the third quarter of 2025. This marked a significant increase from the 10.3% margin reported in the second quarter of 2025.

This improvement is driven by cost control and a better mix of vehicle sales, with models like the ES6 and EC6 achieving margins of 25% or above. The overall company gross margin also reached 13.9% in Q3, which was the highest level in nearly three years.

Expansion of the innovative Power Swap Network

The Power Swap Station network helps manage the long-term costs of vehicle ownership. Nio continues to invest in this network, which is a key service for its cars and a cost center they are optimizing. On October 31, 2025, Nio operated 3,614 Power Swap Stations worldwide.

This network is supported by 4,801 charging stations, each containing 27,396 chargers. Industry estimates place the construction cost of a swap station at approximately RMB 1.5–3.0 million, excluding battery costs. The company’s goal remains to exceed 4,000 total swap stations worldwide by the end of 2025.

International expansion to secure revenue targets

Beyond the domestic network, reaching the Q4 target relies on international market expansion, specifically with the affordable Firefly sub-brand. Firefly hit a milestone of 30,000 cumulative deliveries on Friday, November 21, 2025, seven months after the brand’s launch.

The right-hand-drive Firefly model entered mass production on Monday, November 18, 2025, with the first batch destined for Singapore. Nio plans for the Firefly brand to enter markets such as the UK and Thailand in 2026, focusing on regions with lower punitive tariffs on Chinese electric vehicles.

Strategic reduction of R&D investment

One way Nio is paying for its significant international push is by smarter spending. Nio reported a total research and development expenditure of 2.97 billion Chinese Yuan for the third quarter of 2025.

This cost-cutting contributed to the net loss narrowing to 3.66 billion Chinese Yuan for the quarter, an improvement from the previous quarter.

This strategic effort focuses development on high-value projects, such as the upcoming ET9 executive flagship sedan. The company is committed to demonstrating that innovation can coexist with increased operational efficiency.

Challenges with new battery technology

Despite this focus on new models, Nio confirmed a specific challenge with its new battery technology. The 150 kWh semi-solid-state battery, which can give the ET7 sedan a maximum range of over 1,000 km, has seen limited demand from users.

This battery pack is significantly expensive, costing approximately 300,000 Chinese Yuan, which is roughly equivalent to the price of an entire ET5 sedan. CEO William Li announced on Monday, November 17, 2025, that production of the battery was discontinued due to a lack of flexible upgrade demand from customers.

European market model expansion

The Q4 profitability drive is also supported by expanding sales in Europe, which helps increase delivery volume outside of China. Nio first launched in Germany on Friday, October 7, 2022, offering the ET7, EL7, and ET5 models. In Europe, NIO offers both subscriptions and direct purchase options, a change introduced on Nov 21, 2022.

Deliveries of the newest smart electric flagship SUV, the EL8, commenced following its European launch on June 13, 2024, in select markets, including Norway, Germany, and the Netherlands. This ongoing expansion adds to the potential overseas revenue stream.

Manufacturing capacity and high-volume production

Achieving the aggressive Q4 delivery target relies heavily on Nio’s manufacturing capability. NIO’s Hefei bases include F1 and F2; F2 began production on September 26, 2022, and the 500,000th NIO rolled off on May 9, 2024.

Nio’s second manufacturing base, Factory 2 (F2), officially commenced production in the third quarter of 2022. F2 is the location where the company reached a milestone of its 500,000th mass-produced vehicle rolling off the line on Thursday, May 9, 2024.

Strategic partnerships for swapping technology

To lower the costs associated with its battery network, Nio is forming strategic partnerships that will expand the use of its swapping technology. Nio signed a battery-swapping cooperation agreement with Changan Automobile on Tuesday, November 21, 2023.

This partnership aims to jointly formulate standards for swappable batteries and share the network. Furthermore, Nio signed a similar strategic agreement with Geely Holding Group on Wednesday, November 29, 2023. Sharing this infrastructure spreads the high operating expenses of the network.

The brand’s small EV line, the Nio Firefly, has reached a new sales milestone with 30,000 cumulative deliveries.

Next-generation charging technology

Nio continues to invest in high-power charging to support the future profit drivers, including the new ET9. The company’s newest Power Charger 4.0 boasts a maximum voltage of 1,000V and peak power of 640kW.

This high-power charging system supports the 150 kWh battery pack, which holds an energy density of 360 Wh/kg. Nio’s next-generation Power Swap Station 4.0 went live on Thursday, June 13, 2024, and can complete a battery swap in only 144 seconds. This speed is 22% faster than the previous generation station.

Then compare two of the most popular compact electric sedans in NIO ET5 vs. Tesla Model 3: What’s the difference.

Do you think confidence alone can turn Nio’s Q4 around? Share your thoughts below.

Read More From This Brand:

• Nio Onvo launches L90 Black Knight Edition, limited to 999 units
• NIO Firefly may launch a new model with a stronger motor
• Deutsche Bank forecasts 35k Nio, 72k Tesla, 42k Xiaomi EVs in Sept

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This slideshow was made with AI assistance and human editing.