From Middle Eastern tycoons to local governments, why are they all bottom-fishing NIO?
Author | Ding Mao
Editor | Zhang Fan
On September 17th, NIO announced that its equity financing of $1.16 billion had been successfully completed.
Notably, due to the exercise of the over - allotment option, the final amount of this financing exceeded the previous market expectations, demonstrating the capital market's recognition of NIO.
As a typical growth - oriented company, with high - intensity R & D investment and a heavy - asset model, NIO, which has not been able to generate self - sustaining cash flow, has been under huge financial pressure. As of the end of the second quarter, NIO's cash reserve on the books was only about 27 billion yuan, while the quarterly loss was nearly 5 billion yuan.
Facing the tight fundamentals, the successful completion of this financing is undoubtedly a timely help for NIO. It not only injects a boost into its precarious financial situation but also further enhances NIO's competitiveness in new products and sends a positive signal to the market.
After the favorable financing news was realized, the market responded positively. On September 17th, NIO's Hong Kong stocks closed up more than 11%; its US stocks closed up more than 6%. From September 11th to now, NIO's Hong Kong stocks have rebounded more than 20% in total, and its US stocks are close to 30%.
So, why can NIO still win the favor of capital even in difficult situations? Can NIO tell a story of turnaround from difficulties within this year?
The Favored NIO
From the perspective of fundamentals, NIO's loss in the first half of 2025 was nearly 10 billion yuan, and the cumulative net loss since its listing has exceeded 100 billion yuan. As of Q2 2025, its cash reserve on the books (including cash and cash equivalents, restricted cash, short - term investments, and long - term time deposits) was only 27 billion yuan, with cash and equivalents at 7 billion yuan.
However, in the capital market, NIO is the company among new - energy vehicle startups that has the most financing times and the largest cumulative financing amount. Especially after its recent tight financial situation, NIO has started an intensive financing mode, and various institutions have also joined the bottom - fishing camp. Among them, there is the frequent endorsement of Anhui state - owned assets, the large - scale investment of Middle - East tycoons (Abu Dhabi sovereign wealth fund), and the support of many international investment banks.
So, why are institutional investors willing to continuously provide funds to keep it alive? The core logic behind it may be that investors are willing to pay for NIO's scarcity.
On the one hand, this scarcity lies in the high - end brand image that NIO has built over a long - term period. The NIO brand focuses on the high - end pure - electric vehicle market above 300,000 yuan. It has a perfect product matrix, excellent product quality and configuration, good customer reviews, and a stable monthly sales volume close to 20,000 units.
After opening up the high - end market with its product strength, NIO has built a powerful user community around platforms such as "NIO House + NIO Space + NIO App". Through ultimate experiences and a sense of exclusivity, it has enhanced the stickiness between car owners and the brand, formed strong brand loyalty, and built a unique high - end moat.
On the other hand, NIO's BaaS model is also highly scarce. The BaaS model provides users with services of separating the vehicle from the battery and battery leasing. Coupled with its all - scenario NIO Power service system of "chargeable, swappable, and upgradable", it can effectively relieve users' range anxiety and concerns about battery degradation, and at the same time, it also lowers the threshold for users to buy a car.
Take the ES8 as an example. The pre - sale price of the six - seat administrative luxury version of this model starts at 416,800 yuan. However, if purchased through the BaaS battery leasing method, the pre - sale price drops to 308,800 yuan. For NIO, which never reduces prices, this indirect "price adjustment" method can undoubtedly attract more potential consumer groups who are held back by price factors. In addition, another advantage of the BaaS model is that it effectively boosts NIO's resale value and strengthens its high - end brand image. According to the data jointly released by the China Automobile Dealers Association and Jingzhengu, under the 75kWh battery + Baas leasing plan, the one - year resale value rate of the NIO ES6 is as high as 74.5%, higher than that of the Tesla Model Y in the same period.
Is there a high probability of achieving profitability in the fourth quarter?
In addition to scarcity, another reason why institutions are optimistic about NIO is that its fundamentals are showing a comprehensive improvement trend this year, increasing the probability of a turnaround from difficulties. Therefore, choosing to intervene at such a time is equivalent to aiming for potential higher returns at a relatively low valuation.
However, whether NIO can tell its story well highly depends on its performance in the second half of the year, especially the improvement of its profitability. For a long time, the inability to generate self - sustaining cash flow has been the main criticism of NIO in the market. After the market turned into a stock competition, NIO's pressure has further increased.
In an internal speech at the end of August, Li Bin reiterated the goal of achieving single - quarter profitability in the fourth quarter of this year, highlighting the urgency of profitability. In fact, in the past period, NIO has launched a series of self - rescue measures around "cost reduction and efficiency improvement".
(1) Cost reduction. Through self - developed chips and improving platformization levels, it can reduce the cost per vehicle. For example, under the NT3.0 platform, replacing 4 NVIDIA Orin - X chips with the self - developed Shenji NX9031 intelligent driving chip can achieve a cost optimization of nearly 10,000 yuan.
At the same time, the LeDao L90 shares the technology and supply - chain system with NIO's NT3.0 platform, which improves the generalization rate of components. With a higher sales volume, it can enhance the bargaining power in the supply chain and better play the scale advantage to spread R & D and production costs.
Benefiting from these positive factors, NIO's cost per vehicle has shown a significant downward trend. According to the financial report, in Q2 2025, NIO's cost per vehicle decreased from 212,000 yuan to 201,000 yuan per vehicle, a year - on - year decrease of more than 5 percentage points.
Figure: Changes in NIO's cost per vehicle Data source: wind, compiled by 36Kr
(2) Cost control. By streamlining the organizational structure and controlling R & D investment, it can compress the period - cost ratio and create more room for profit.
Under the new business mechanism CBU, NIO has achieved full - link compression of R & D, management, and sales expenses through accurate ROI calculation. In the second quarter, there were significant signs of cost control. The financial report data shows that in Q2 2025, the company's R & D expenses and SG & A expenses both showed a simultaneous downward trend year - on - year and quarter - on - quarter. The R & D expense ratio dropped to 15.8%, a year - on - year and quarter - on - quarter decrease of 2.6/10.6 percentage points; the SG&A expense ratio was 20.9%, a year - on - year and quarter - on - quarter decrease of 0.7/15.7 percentage points respectively.
Figure: Changes in NIO's period expenses Data source: wind, compiled by 36Kr
Benefiting from comprehensive cost reduction and efficiency improvement, NIO's loss margin has been continuously narrowing. So, under this background, what is the probability that NIO will get rid of the loss in the fourth quarter?
Figure: Changes in NIO's quarterly profit Data source: wind, compiled by 36Kr
According to the guidance, in Q3 2025, the company expects to deliver 87,000 - 91,000 vehicles, with revenues of 21.8 billion - 22.9 billion yuan. Calculated based on this, the revenue per vehicle is about 251,000 yuan; in Q4 2025, it is expected to deliver more than 150,000 vehicles, and the gross profit margin of the whole vehicle will reach 16% - 17%. Assuming that the revenue per vehicle remains unchanged, the estimated revenue in the fourth quarter is about 37.65 billion yuan.
At the same time, it is expected that the non - GAAP R & D expenditure will be controlled at 2 billion yuan per quarter, and the non - GAAP SG & A expense ratio will be within 10%. According to the estimated revenue scale, the R & D and SG & A expenses in Q4 will be 2 billion and 3.77 billion yuan respectively, corresponding to an R & D expense ratio and SG & A expense ratio of 5.3% and 10% respectively.
After comprehensive calculation, NIO is expected to achieve a net profit margin of 0.7% in Q4, and there is indeed hope to achieve the break - even point. However, there are very strict assumptions behind this. First, NIO's monthly average delivery volume in the fourth quarter should be maintained above 50,000 units, and in terms of product structure, the proportion of high - end models needs to increase to drive the improvement of the average price per vehicle; second, the scale effect should take effect, and NIO's cost per vehicle can be effectively spread to ensure that the gross profit margin level is increased to above 16%; third, it should continue to strengthen cost - control efforts and keep R & D and other expenses within the lower expected range.
Will it become the next XPeng?
Although the positive profit reading can boost market confidence in the short term, compared with that, the market is more concerned about whether NIO can successfully replicate XPeng's gross - profit - margin turnaround path through the "new - product cycle + volume - for - price strategy" and thus gain a foothold in the elimination competition.
Looking back at XPeng's turnaround from difficulties, in addition to the optimization of the organizational structure and supply chain, more importantly, it is the scale effect driven by the dual wheels of the price - cut strategy and the strong product cycle. In 2024, the two popular models, Mona M03 and P7+, were launched one after another. Combined with the volume - for - price strategy, XPeng's sales rebounded sharply, generating a huge scale effect and driving the company's gross profit margin to rise instead of fall and continue to improve. In this context, although XPeng has not yet achieved profitability, the market's confidence in its continuous operation has been significantly enhanced, and its stock price has started a new upward channel.
The core logic behind this is that automobile manufacturing is a business that highly depends on scale to spread costs. For NIO, its high R & D and marketing costs, as well as its heavy - asset battery - swapping model and NIO House service system, make it more dependent on sales volume. This also means that compared with XPeng, NIO needs a higher sales volume to spread unit costs and a higher vehicle ownership to improve the utilization rate of battery - swapping stations.
Therefore, from this perspective, the continuous improvement of the gross profit margin seems to better reflect an automaker's long - term operating ability and profit potential than the short - term positive profit reading.
Back to NIO, its multi - brand strategy has initially achieved results. "NIO + LeDao + Firefly" covers multiple markets from high - end to entry - level. In the first full - delivery month, the LeDao L90 exceeded 10,000 units, driving NIO Group's delivery volume in August to exceed 30,000 units. The release of sales has greatly enhanced market confidence. Subsequently, the ES8, with the price attractiveness of the BaaS plan, also shows the potential to become a popular model.
Figure: NIO's multi - brand strategic layout Data source: NIO's financial report, compiled by 36Kr
Figure: NIO's quarterly delivery situation and performance per vehicle Data source: wind, compiled by 36Kr
This means that NIO seems to be opening its own strong product cycle through the LeDao L90 + ES8, and price - cut measures such as the BaaS plan have also effectively lowered the threshold for buying a NIO car, greatly increasing the possibility of replicating XPeng's successful path.
However, whether this expectation can be realized ultimately depends on the follow - up new - car launches of NIO to form a relatively long product cycle based on the new NT3.0 platform. According to the currently disclosed new - car plan, models such as the LeDao L80, NIO ES9, and NIO ES7 are expected to be launched one after another in 2026, but compared with its competitors, its new - product launch speed seems a bit conservative. In the fierce market competition, whether this conservative strategy will limit its continuous sales growth momentum is an aspect that needs to be focused on in the future.
In conclusion, from an investment perspective, the follow - up observation of NIO should not only focus on the positive profit reading but more importantly, verify whether it can achieve continuous sales growth through the combination of the "new - product cycle + volume - for - price strategy", thus generating a scale effect and driving the continuous improvement of the gross profit margin.
After all, whether it makes money in the short term seems not as important as long - term sustainable operation.
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The content of this article only represents the author's views.
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