Financial report analysis: NIO emerged from the "danger zone" in the first half of the year and set its sights on higher goals.

In the first half of the year, NIO released a financial report that its CEO, Li Bin, described as "entering a new cycle." Data shows that in the second quarter, NIO achieved a revenue of 19.01 billion yuan (approximately $2.65 billion), a quarter-on-quarter increase of 57.9% and a year-on-year increase of 9%.

Image source: NIO's official Weibo account

This financial report, which the market calls "impressive," not only shows the dual benefits of NIO's revenue growth and narrowing losses but also reveals that this new force in the automotive industry is achieving systematic cost reduction through a multi-brand strategy and self-developed technologies.

Profitability inflection point has emerged, with improved gross margin and narrowing losses as highlights

The financial report shows that NIO's revenue in the first half of 2025 was 31.043 billion yuan (approximately $4.333 billion), a 13.5% increase from 27.355 billion yuan in the same period last year.

The significant increase in NIO's revenue in the first half of the year was mainly due to the increase in vehicle deliveries. In the second quarter, NIO delivered 72,000 vehicles, a year-on-year increase of 25.6% and a quarter-on-quarter increase of 71.2%. Benefiting from this, its vehicle sales revenue in the second quarter was 16.14 billion yuan, a year-on-year increase of 2.9% and a quarter-on-quarter increase of 62.3%.

NIO continued this growth trend in the third quarter. It delivered 21,017 and 31,305 vehicles in July and August respectively. From January to August, NIO cumulatively delivered 166,500 new vehicles, a year-on-year increase of 29.95%. It is estimated that NIO will deliver 87,000 to 91,000 vehicles in the third quarter, a year-on-year increase of 40.7% to 47.1%.

Meanwhile, NIO also achieved significant improvements in profitability indicators in the second quarter of 2025. In the second quarter, NIO's overall gross margin reached 10.0%, an increase of 0.3 percentage points compared to the same period last year and 2.4 percentage points compared to the previous quarter.

This change is mainly due to the mass production of the self-developed Shenji NX9031 chip, which reduced the cost per vehicle by about 10,000 yuan. At the same time, the terminal prices of the new 5566 series models stabilized and rebounded, promoting a structural improvement in profitability.

As Li Bin emphasized, NIO had made full preparations when defining its products, providing strong cost support for aggressive pricing. This is also based on its long-term self-developed technology accumulation and cost control measures to achieve cost reduction.

More encouragingly, the company's operating cash flow rebounded to 27.2 billion yuan ($3.8 billion), an increase of 1.2 billion yuan compared to 26 billion yuan at the end of the first quarter, also better than market expectations. These signals consistently indicate that NIO's operations have passed a critical inflection point, and the overall recovery trend is accelerating.

Driven by cost and efficiency optimization measures, NIO's losses have significantly narrowed. The company's net loss in the second quarter was 4.99 billion yuan, a narrowing of 1.0% and 26.0% compared to 5.05 billion yuan in the same period last year and 6.75 billion yuan in the previous quarter respectively.

Overall, NIO's financial performance in the first half of the year confirms the initial effectiveness of its strategic transformation. Through cost reduction and efficiency improvement with self-developed technologies and product structure optimization, the company has shown positive trends in three major dimensions: revenue growth, gross margin improvement, and loss narrowing. This marks that its operating conditions have passed a critical inflection point, laying a solid foundation for the continuous recovery of its performance in the second half of the year.

The multi-brand strategy is paying off, and the third-quarter guidance hits a record high

Behind the improved performance is NIO's precise implementation of its multi-brand strategy and market positioning. Relying on the three brands of NIO, LeDao, and Firefly, it has achieved full coverage of the high-end luxury, mainstream family, and premium small car market segments, forming a product matrix for collaborative development.

Especially in the highly competitive SUV market, NIO has successfully captured the minds of consumers with its dual-flagship SUV strategy. The new ES8 maintains its benchmark position in the high-end pure-electric SUV market, while the LeDao L90 enters the family user market with a highly competitive price. It delivered over 10,000 vehicles in its first month on the market, showing strong market appeal.

In terms of delivery volume, NIO's high-end intelligent electric vehicles under the NIO brand delivered 47,132 vehicles, the family intelligent electric vehicles under the LeDao brand delivered 17,081 vehicles, and the premium intelligent electric small cars under the Firefly brand delivered 7,843 vehicles.

On the product front, NIO has also been quite active recently. It launched the LeDao L90 at the end of July, and then the new ES8 started pre-sales in August. Both models have been widely recognized by the market for their leading product positioning and unexpected pricing strategies.

Image source: NIO's official Weibo account

Among them, the LeDao L90 is positioned as a "smart large-space flagship SUV," with the core selling point of "three rows of comfortable sleeping space and double the luggage capacity." It precisely meets the actual needs of multi-person family travel. The model exceeded 10,000 deliveries in its first full month on the market, becoming the fastest model under NIO to reach this milestone, fully demonstrating its strong product appeal.

Looking at the Chinese automotive market, the rule of "those who master large vehicles win the market" has emerged. From the Li Auto L series to the AITO M series, large new energy SUVs have shown strong performance in terms of sales contribution, profitability, and brand enhancement.

NIO's focus on the "swappable pure-electric three-row" market segment is a precise response to this trend, and it has formed unique differentiated competitive advantages based on its long-term technological accumulation.

Based on NIO's precise understanding of market demand and careful production capacity planning, its revenue guidance for the second half of the year is also optimistic.

The financial report shows that NIO expects its total revenue in the third quarter to reach 21.81 billion yuan (approximately $3.045 billion) to 22.88 billion yuan (approximately $3.193 billion), a year-on-year increase of 16.8% to 22.5%. This guidance has greatly boosted market confidence and reflects the company's strong optimism about its product competitiveness and market demand prospects.

In response, NIO founder Li Bin said at the Q2 2025 earnings conference call, "In the future, the product competitiveness of the automotive industry will depend on three levels of capabilities: first, the technology roadmap, second, product planning, and finally, product definition." NIO has always been committed to developing its capabilities in technology roadmap and product planning.

Facing the fourth-quarter goals, NIO is accelerating the improvement of its production capacity. The total production capacity target for the three brands in the fourth quarter is 56,000 vehicles, including 25,000 for NIO, 25,000 for LeDao, and 6,000 for Firefly, to support the monthly delivery target of 50,000 vehicles.

Conclusion

NIO is reaching an inflection point where its previous technological investments are translating into user experience advantages. With the achievement of the third-quarter delivery and revenue guidance and the progress towards the fourth-quarter profit target, NIO is expected to regain its leading position in the rapidly developing pure-electric vehicle market.

The improvement in gross margin and positive cash flow indicate that NIO has found a development path suitable for itself. As the competition in the new energy vehicle market enters the second half, NIO's battery-swapping model and self-developed technology advantages are expected to be further highlighted.

This article is from the WeChat official account "Hong Kong Stock Research Club" (ID: ganggushe). The author is Hong Kong Stock Research Club. It is published by 36Kr with permission.