Counting down 70 days, will NIO cross the profit line?

"The profit target for the fourth quarter must be achieved." At a recent internal meeting of NIO, Li Bin listed this as the first item in his personal VAU (Personal Performance Assessment) and emphasized that "it's not for show but the cornerstone of the company's long - term sustainable development."

To help NIO get out of the "cliff zone," Li Bin, the helmsman of NIO, has shown a determination to burn bridges behind him. However, time is running out for him and NIO.

As of the second quarter of 2025, NIO's cumulative losses have exceeded 120 billion yuan. The losses in the first half of 2025 alone reached 10.405 billion yuan. If there is no timely "blood transfusion," its cash reserve of 27.2 billion yuan as of the end of the second quarter of 2025 may be exhausted within 16 months.

Therefore, Li Bin set the goal of "making a profit in the fourth quarter" at the beginning of the year. Recently, at an internal meeting, Li Bin further clarified the urgency of "making a profit" and put forward three requirements: "ensuring deliveries, grasping the supply chain, and delivering high - quality software."

Now, there are only 70 days left in 2025. Whether Li Bin can lead NIO out of the cliff of losses may directly rewrite NIO's fate.

NIO Standing on the Edge of a Cliff

Since its establishment, NIO's cumulative losses have exceeded 120 billion yuan, a figure that is far ahead among China's new - energy vehicle startups. Li Bin knows better than anyone that NIO has reached the edge of a cliff of survival.

In the past, the capital market was relatively liquid, and the "error - tolerance space" for new - energy vehicle companies was maximized. NIO was able to maintain a "money - burning mode" and make heavy investments in brand building, battery - swapping infrastructure, and technology R & D.

However, as the competition in the automotive industry has become more intense, the changing market situation has given Li Bin a "wake - up call" and awakened this "person pretending to sleep."

In March this year, NIO began to promote organizational reform across the company. Simply put, it split all the company's business operations into multiple "basic business units," each with independent accounting.

After that, Li Bin personally took charge of supply - chain management, squeezing costs down to the fourth decimal place. In his internal speeches, he repeatedly emphasized the severity of the situation, saying that "changes must be made; otherwise, the company won't survive."

At the same time, Li Bin announced the goal of achieving profitability in the fourth quarter of 2025. Before that, he had once set the profit - making time for 2026.

NIO proactively advanced the profit target. On the one hand, it was to push the internal team to "tighten the screws," break the organizational inertia with a pre - set goal, and activate a sense of urgency. On the other hand, it felt the urgency of the market and tried to convey the company's "determination to break the deadlock" to the market through a clearer goal, seeking more trust and support.

The effect was obvious. After a series of internal reforms, NIO's stock price began to recover from the trough. As the countdown to the profit deadline began, Li Bin held an internal meeting to re - emphasize that "profitability must be achieved."

To successfully "hand in the answer sheet," Li Bin broke down this goal into three specific actions: doing a good job in marketing key models, ensuring supply and reducing costs in the supply chain, and delivering high - quality software on time.

Previously, NIO had already launched a cost - reduction campaign and improved supply - chain efficiency to ensure deliveries. As long as the sales volume increases, it is expected to reach the break - even point with the support of economies of scale.

First is "selling more cars." Li Bin said bluntly that "for each additional car delivered, the probability of making a profit this year will increase a little." Among them, the NIO ES8 and the LeDao L90 have become the "sales engines" in the second half of the year. Except for the facelifted L60, NIO will not launch any new models in the fourth quarter.

Second is "ensuring deliveries." Learning from the lesson of the LeDao L60 losing orders due to insufficient production capacity, Li Bin believes that "ensuring supply - chain efficiency" will be an important goal in the fourth quarter. Among them, the production capacity of the NIO ES8 in December should reach more than 15,000 units.

Finally is "emphasizing the experience." Li Bin mentioned that high - quality software must be delivered on time in the fourth quarter. This requirement is obviously in consideration of the increasing number of intelligent driving accidents recently. In the current public opinion environment, one accident is enough to break down users' trust in the brand. "Ensuring safety" has always been the bottom line for car companies.

In Li Bin's view, as long as NIO can overcome these "three mountains," the profit target is not far away. However, making a profit in the fourth quarter is only a short - term goal. The core lies in systematically building the above - mentioned capabilities into "systemic capabilities," which is NIO's long - term strategy.

The Shadow of Short - Selling Doubts

It seems that NIO's series of drastic reforms are quite inspiring. They aim at NIO's long - criticized cost - control problem. Most importantly, they show the outside world Li Bin's determination to change.

You know, the last new - energy vehicle startup founder who "took advice" was He Xiaopeng. He carried out a series of anti - corruption actions in the supply chain at XPeng Motors and invited Wang Fengying, the former president of Great Wall Motors, to join. Since then, XPeng Motors has clearly improved. In the first three quarters of this year, XPeng Motors sold 313,000 vehicles, a year - on - year increase of 217.8%, far exceeding Li Auto and NIO.

XPeng Motors' successful experience also provides guidance for NIO. If NIO follows the path of "reshaping the supply chain," it is also expected to get out of the dilemma of "high costs and low efficiency" and provide substantial support for the profit target.

However, just as NIO is going all out to achieve the profit target, an undercurrent from the capital market has unexpectedly emerged. According to Caixin, GIC, a Singaporean sovereign wealth fund, has sued NIO and its executives, accusing NIO and its subsidiary, WENENG Battery Asset Company, of exaggerating revenues and profits and concealing the actual control relationship with WENENG, misleading investors and causing them losses.

As soon as the news came out, NIO's stock price immediately "dived," and its market value evaporated by more than 10 billion yuan in half a day. NIO quickly responded, saying that this case originated from the false accusations against NIO in a short - selling report by Grizzly Research, a short - selling institution, in 2022. An unnamed NIO executive revealed that "it's unclear why someone is hyping this up recently."

The short - selling institution Grizzly Research pointed out in its report that after NIO sold a large number of batteries to its affiliated company WENENG, it recognized all the revenues at once. However, this revenue is essentially the battery rental service fee for the next few years. NIO recognized the future revenues in advance, which is suspected of beautifying the financial statements.

NIO insists that its act of selling batteries to WENENG and recognizing the revenues at once complies with accounting standards because the "control" of the batteries was transferred at the time of sale. It believes that Grizzly's accusations are a misinterpretation of the BaaS model.

The final outcome of this lawsuit remains to be determined by the judicial authorities. However, it's hard to ignore the timing of GIC's lawsuit. Currently, NIO's profitability is most questioned by the market, and this lawsuit precisely hits NIO's most vulnerable point - the trust of the capital market.

For a company that has not achieved stable profitability and still relies on financing, once investors' confidence wavers, it can be even more destructive than a temporary decline in sales.

In September this year, NIO announced that it had successfully completed an equity issuance totaling $1.16 billion. According to public information, NIO completed three public financings this year. Among them, the two financings in September were only one week apart.

For NIO, it's good to continuously get support from the capital market, which means it is still recognized by the market. However, from another perspective, it also means that it has never been able to get rid of the need for capital "blood transfusion." These financings are more like forced "life - saving measures."

However, the capital market always adds flowers to the brocade easily but rarely provides timely help. NIO, which has relied on financing for a long time, is actually consuming the market's trust. But the capital market can't create money indefinitely. After seven years of relying on "blood transfusion" to survive, NIO's story may be coming to an end, and it's time to pay off the debt.

Can It Really Make a Profit?

Therefore, although Li Bin has announced the goal of "making a profit in the fourth quarter," the market wants to know if it's really achievable. In fact, as early as the first - quarter earnings conference call this year, Li Bin proposed two "remedies" for achieving profitability:

One is for NIO and LeDao to achieve a "monthly sales volume of 50,000 vehicles" combined; the other is to control the gross profit margin at 17% - 18%. Among them, R & D expenses should account for 6% - 7% of revenues, and sales expenses should account for 10% of revenues. These two "remedies" actually mean cost reduction and efficiency improvement.

So, how has NIO performed in the past six months?

First, look at the sales volume. In September this year, NIO delivered 34,749 new vehicles, a year - on - year increase of 64%. Among them, the NIO brand delivered 13,728 new vehicles; the LeDao brand delivered 15,246 new vehicles; and the Firefly brand delivered 5,775 new vehicles. In the third quarter, NIO's cumulative new - vehicle deliveries reached 87,000, setting a new quarterly delivery record.

However, these two figures are still far from Li Bin's goal of "monthly sales of 50,000 vehicles." Currently, among the new - energy vehicle startups, only Leapmotor can achieve a monthly sales volume of over 50,000 vehicles.

Next, if NIO wants to achieve the delivery target of 150,000 vehicles in the fourth quarter, it means selling at least 1,600 vehicles per day on average. This also means that NIO has to deliver nearly 70% of the total delivery volume of the first three quarters in the next three months.

Now, the LeDao L60 has just reached its 100,000 - vehicle delivery milestone. Compared with the setback of the LeDao L60, the increasing sales of the LeDao L90 have given NIO a boost, indicating that the strategy of low - price and high - volume sales is starting to work.

The new - generation ES8 was also launched in September. From the second - generation ES8 to the third - generation ES8, NIO can continue to reuse the capabilities accumulated in brand, design, and user experience in the early stage, enabling the ES8 to maintain the recognition of high - end users. The number of small orders has exceeded 100,000.

However, although models like the LeDao L90 and the new ES8 are performing well, whether NIO can achieve sales of 150,000 vehicles in the fourth quarter still remains to be verified by the market. Anyway, NIO can't fight a battle without confidence, which is why Li Bin emphasized "ensuring supply" at a recent internal meeting.

Next, look at the gross profit margin. Li Bin set the gross - profit - margin target for the fourth quarter at 16% - 17%, while NIO's overall gross profit margin in the second quarter was 10%. There is still a significant gap between the two. The price cuts of some models have also put pressure on the overall gross profit margin.

However, NIO's "cost - reduction" is not just empty talk. For example, in September this year, NIO closed two NIO Houses in Guangzhou. Some users also reported on social media that NIO Houses had cancelled snacks and Mid - Autumn Festival gifts.

At the internal meeting, Li Bin said that "the effect of reducing losses in the third quarter is still being financially accounted for, so it's not convenient to elaborate. But it has indeed laid a foundation for making a profit in the fourth quarter."

Judging from the data alone, it's quite difficult for NIO to achieve profitability in the fourth quarter. However, considering Li Bin's attitude, it's not entirely impossible. This race to make a profit is really nerve - wracking.

As Li Bin said, "In the fourth quarter, we should focus on selling cars, implementing cost - reduction measures, and improving the user experience. As long as we do these three things well, there is a great chance of achieving profitability in the fourth quarter."

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