Why did NIO suddenly start making money?

The single - quarter profit report is not the ultimate trophy for NIO's complete victory. It is merely a ticket that NIO has obtained after going through numerous hardships, leading to the more brutal elimination round in 2026.

NIO has started to make a profit.

Yes, it's the NIO that used to lose tens of billions of yuan a year and had lost a total of 100 billion yuan in the eight years since its establishment.

In the fourth quarter of 2025, its operating profit reached 1.25 billion yuan, and the net profit reached 283 million yuan.

Just two and a half years ago, its quarterly loss was as high as 6.07 billion yuan. According to LatePost's report, at that time, on average, NIO would lose 258,000 yuan for each car sold. With this amount of money, one could buy three BYD Qin cars in full at that time.

How did this company, known for its excessive spending, turn over a new leaf and become good at managing finances?

In this episode, let's talk about NIO's profitability.

01

Last March, Li Bin, the boss of NIO, set a goal for himself at a media communication meeting:

"If NIO can only do one thing or has only one goal this year, what would it be? It is to make a profit in the fourth quarter of this year."

Subsequently, the entire company launched an unprecedented cost - saving campaign.

First came a wave of layoffs of an extremely strict level.

The company completely merged the channels of the three brands, NIO, LeDao, and Firefly, and also carried out a major purge of the sales and service team.

Then, teams such as after - sales customer service, the energy department, and the brand department, which are more inclined to cost expenditure rather than revenue generation, became the hardest - hit areas for layoffs.

In just one quarter, 5,000 names disappeared from the company's human resources system.

Employees who were lucky enough not to be laid off found that their benefits had been reduced.

The mineral water in the office was replaced with filtered water. The stationery budget of 120 yuan per person per year was reduced to 6 yuan per month. The employee activity funds were cancelled, and the number of activities decreased.

Some senior employees not only lost their meal allowances but were also encouraged to convert 20% of their monthly salaries into stocks to share weal and woe with the company.

If the employees' treatment is reduced, the treatment of car owners also has to be discounted.

In the past, what NIO was most proud of was its service system, especially the NIO House, which was built at a high cost for car owners.

It had a decoration cost in the tens of millions, high - end coffee machines worth tens of thousands of yuan, and hand - sanitizers priced at hundreds of yuan per bottle. However, as NIO launched the cost - saving campaign, the fresh Phalaenopsis orchids replaced weekly in the NIO House were replaced with cheap artificial flowers, and the hand - sanitizer was also replaced with a common brand at a group - purchase price of dozens of yuan.

Everyone, from employees to car owners, felt that NIO had started to live frugally.

But this was just a campaign - style cost - saving. NIO also needed to establish a company system for cost - saving.

At the beginning of last year, NIO fully introduced the "Minimum Business Unit (CBU)" mechanism.

What is CBU?

To put it simply, it is to split the large departments in the past into smaller independent units. Each unit has to independently calculate costs and outputs to ensure efficiency.

For example, in the past, a salesperson only cared about how many cars were sold, how much sales revenue was achieved, and how much bonus could be obtained.

However, under the CBU mechanism, sales costs are also taken into consideration.

If you sell a car through sales leads purchased by the company online, the lead cost needs to be included. If you make a deal by receiving customers at the store, the store cost needs to be included. If you actively develop customers and make a deal, there are no such costs mentioned above, and only the salesperson's own salary and bonus need to be included.

At the end of the month, calculate the input - output ratio. If it is negative, even the top salesperson will face the risk of salary reduction or layoff.

How small can this unit be? The smallest unit can be refined to a specific car, a specific battery, or a specific venue. Each of them has an independent income - expenditure operating statement.

For example, when the sub - brand Firefly wanted to hold a launch conference, the conference was also an operating unit. Renting a venue and equipment would cost more than 100,000 yuan anyway.

Finally, the team chose to hold it at the NIO House in the Shanghai Tower, and the venue cost could be controlled at 100,000 yuan, making the statement look better.

On the other hand, the NIO House is also an operating unit, with daily rental costs. By hosting a conference, it can instantly receive 100,000 yuan in income, and its own operating statement will look much better.

At the company level, it not only reduces costs but also activates venue assets, killing two birds with one stone.

Of course, what is beneficial to the company is often cruel to employees.

With CBU, it's as if every morning when you wake up, there is an 8 - hour work debt on your account. Everyone has to calculate their input - output ratio.

So, everyone began to think about how to save more money and create more benefits for the company within their own authority and processes.

Unprofitable charging piles should be removed. Luxurious NIO Houses and NIO Spaces are closed or downgraded. Try to reuse equipment instead of purchasing new ones.

So, we saw that NIO, which had only focused on big things in the past ten years and hardly considered the input - output ratio, completely reversed the company culture and developed a cost - saving habit in just half a year.

So, how much money was actually saved in this cost - saving campaign?

Looking at the financial report, in the fourth - quarter financial report of 2025, NIO's sales and management expenses were 3.54 billion yuan.

What about the same period of the previous year? It was about 4.9 billion yuan.

In one quarter, NIO saved about 1.3 billion yuan, more than the operating profit of this quarter.

It can be said that without this cost - saving campaign, NIO would never have made a profit.

02

After talking about cost - saving, let's see how NIO makes money.

In 2025, NIO's annual revenue was 87.4 billion yuan, more than 20 billion yuan more than the previous year. The fourth quarter was the most remarkable, with nearly 15 billion yuan more revenue than the same period of the previous year.

Attributing it all, it was thanks to two excellent battles that NIO fought in the second half of last year, which pulled the company back from the brink of the cliff.

The first battle was the LeDao L90, a large three - row pure - electric SUV.

This is a model that is very different from NIO's previous ones.

In the past, Li Bin had a very restrained aesthetic. He didn't like full - size SUVs with overly exaggerated dimensions, nor did he like the so - called "refrigerator, color TV, big sofa" configuration, and he didn't like to put a lot of screens in the car for the sake of a sense of technology.

Then he was beaten badly by his competitors.

The market likes it, but Li Bin doesn't. Who do you think you are?

So, in the L90, there are rear - seat entertainment screens, zero - gravity seats, in - car refrigerators... All the necessary "refrigerator, color TV, big sofa" features are available. This time, Li Bin has learned his lesson.

The core selling point of the L90 is its size.

It has an extremely large interior space.

As we all know, in most three - row, six - seat SUVs on the market, the third row is only for emergency use, with very limited space and an uncomfortable sitting experience. When a two - child family with three generations goes out, someone will definitely have to compromise.

Moreover, once the third row is in use, there is no space left in the trunk.

"Big cars are not big enough", at least the sitting experience is cramped. This is a common problem with three - row, six - seat SUVs.

The breakthrough point of the L90 lies here. Its shape is square, like a big box, completely different from the pure - electric competitors such as the Tesla Model Y with a big - mouse shape and the streamlined Li Auto i8. It may look a bit dull, but the space is maximized.

Moreover, the L90 is developed based on NIO's new NT3.0 platform. Relying on technologies such as motor miniaturization and ultra - thin batteries of the new platform, a lot of space is saved.

As a result, the legroom in each row of the L90 can exceed 1 meter. And even when all three rows are occupied, the depth and height of the trunk are still maximized. According to the official statement, it can hold seven 21 - inch suitcases.

But that's not enough. The L90 also needs a selling point that allows consumers to immediately understand its "bigness".

This selling point is the frunk.

At the Shanghai Auto Show last year, when the LeDao L90 was presented to consumers and the frunk was opened, it shocked everyone.

With a volume of 240 liters, it is truly amazing. Previously, the largest frunk on the market was only 160 liters.

What's even more amazing is that unlike other models with only an opening at the top, the front face of the L90 opens together with the frunk, with an opening width of 830 millimeters. You can not only put things in it but also sit on it like a chair.

NIO even came up with the idea of "sitting in the frunk to fish". Li Bin demonstrated it at the press conference, and it was repeatedly promoted in the sales pitch, allowing consumers to more intuitively feel that this car can really hold a lot.

Then, the most astonishing thing came.

The starting price is 265,800 yuan. If you choose the Baas plan (battery rental plan), it only costs 179,800 yuan plus a monthly rent of 599 yuan.

You know, the Wenjie M9 and M8 with similar sizes, and the Li Auto L9, cost at least 350,000 yuan. The entry - level price of the LeDao L90 is only about half of that. Are you sure you're not a Leapmotor?

As a result, within four days of pre - sale, the number of small - deposit orders for the L90 exceeded 30,000. In the first full - delivery month, the sales volume exceeded 10,000. It became the model with the fastest delivery volume exceeding 10,000 in NIO's history, and had a real small - scale explosion.

After the success of the LeDao L90, NIO continued to make efforts and launched its flagship model, the third - generation ES8, two months later.

As soon as it was launched, the automotive circle was in an uproar.

No one expected that the new ES8 could be so cheap.

The lowest - configuration version of the previous - generation NIO ES8 cost 528,000 yuan.

What about the price of the new ES8? The price dropped by 120,000 yuan directly, and the starting price is only 406,800 yuan. If you choose the most extreme BaaS battery - rental model, it only costs 298,800 yuan, less than 300,000 yuan.

You know, the ES8 was the company's first mass - produced model, which established NIO's positioning as a high - end luxury pure - electric brand and directly raised the brand to the level of competing with BBA.

It can be said that the ES8 is NIO's face.

But in 2026, in order to sell cars, NIO really put aside its pride.

This time, the market's feedback was even more enthusiastic than that of the L90.

In the first full - delivery month after its launch, the delivery volume exceeded 10,000, and it also set a monthly sales record for models priced above 400,000 yuan in China. In just 160 days, the cumulative sales volume of this car exceeded 70,000.

After ten years of entrepreneurship, NIO had never experienced what a "blockbuster" was like. But in 2025, the two excellent battles of the L90 and the ES8 really helped the company make money and saved it from the brink of collapse.

03

So, the question is, how did NIO manage to make a profit by selling cars at a discounted price when it couldn't make money by selling cars at a high price before?

We still need to find the reasons from the two models, the L90 and the ES8.

The L90 has such a large space and is sold at such a low price, so there must be some sacrifices.

What it sacrifices is the range.

The square and large body brings high wind resistance, which reduces the range.

To reduce costs, the battery capacity is reduced, which also reduces the range.

As a result, the standard range of the L90 is 570 kilometers. If you replace it with a 60 - degree battery, the range is only 410 kilometers. Compared with the current mainstream six - seat pure - electric cars with a range of six or seven hundred kilometers, it is really not good.

Similarly, compared with the previous - generation product, the new ES8 has also been downgraded in some aspects.

For example, the four NVIDIA Orin - X chips used in the previous generation and the high - strength steel - aluminum hybrid body have disappeared in the new model. In addition, in terms of the range, due to the larger and more square body, there is no significant improvement compared with the old model.

These are necessary trade - offs to sell cars at a reduced price.

But how to make trade - offs to bring the greatest positive benefits to users with the least negative impact is very worthy of consideration.

For the L90 and the ES8, giving up range is something with relatively small negative impacts.

After all, this is an era when super - charging piles are everywhere, and "ten minutes of charging can provide a thousand - mile range". Although the anxiety about battery power still exists, it is no longer as fatal as in the past few years.

Both the L90 and the ES8 are large three - row, six - seat SUVs, positioned as the main family car or even the only car. Such a car is preferably a well - rounded one. Having enough space, a comfortable riding experience, and a grand and solemn appearance are just as important as the single - time extreme range.

Moreover, NIO may be the new - energy vehicle manufacturer that has gone the farthest and invested the most in energy replenishment.

Its unique battery - swapping mode, more than 3,700 battery - swapping stations and more than 28,000 charging piles across the country are just to solve the range problem. So much money has been invested just to relieve consumers' anxiety and help them make up their minds when buying a car.

And the result is exactly as expected.

Battery - swapping has become NIO's most powerful salesperson.

Thanks to the battery - swapping mode and NIO's energy - replenishment network, the B