Say goodbye to the "grim reaper". Has NIO finally turned the tables and become the master?
NIO (NIO.N) released its financial report for the fourth quarter of 2025 before the U.S. stock market opened and after the Hong Kong stock market closed on March 10, 2026, Beijing time. The performance in the fourth quarter was still good. Specifically:
1. Revenue exceeded expectations and increased significantly year-on-year: The overall revenue in the fourth quarter was 34.7 billion yuan, a year-on-year increase of 76%, exceeding the market expectation of 33.6 billion yuan. This was mainly due to the better-than-expected revenue from car sales, the core business.
The revenue from car sales in the fourth quarter was 31.6 billion yuan, exceeding the expected 30.6 billion yuan. This was mainly because the average selling price of cars increased rapidly in the fourth quarter. Compared with 221,000 yuan in the previous quarter, it increased by 32,000 yuan to 253,000 yuan. The hot sales of the high - priced large SUV ES8 drove the continuous improvement of the vehicle model structure (the proportion of ES8 in the vehicle sales volume increased by 27 percentage points quarter - on - quarter to 32%), which pushed up the average selling price of cars.
2. The gross profit margin of car sales continued to rise significantly quarter - on - quarter: In the fourth quarter, NIO's gross profit margin of car sales was 18.1%, a quarter - on - quarter increase of 3.4 percentage points, which was consistent with NIO's previous guidance of 18% for the fourth - quarter gross profit margin of car sales. The continuous quarter - on - quarter improvement of the gross profit margin was mainly due to: ① The significant increase in the average selling price of cars brought about by the expansion of the sales volume proportion of the high - priced ES8; ② The reduction of the cost per vehicle due to platform - based technology, cost reduction in the supply chain, and economies of scale.
3. Costs continued to be cut drastically, and cost - reduction and efficiency - improvement exceeded expectations: In the fourth quarter, NIO's sales and administrative expenses were only 3.5 billion yuan, a further decrease of 650 million yuan compared with 4.2 billion yuan in the third quarter (also lower than the guidance of 4 billion yuan). This was mainly due to the decrease in salary costs caused by layoffs and the restraint in marketing expenses.
The R & D expenses also decreased by 360 million yuan quarter - on - quarter to 2 billion yuan (lower than the market expectation of 2.5 billion yuan). This was mainly due to the cost reduction caused by layoffs, the completion of the R & D of the NT3.0 platform, and the improvement of R & D efficiency.
4. The net profit finally turned positive and exceeded the upper limit of the performance forecast: With the better - than - expected revenue and gross profit margin, combined with the company's strong cost - reduction, efficiency - improvement, and cost - control measures, the profit was finally released. NIO's net profit in the fourth quarter turned positive (120 million yuan, exceeding the market expectation of - 600 million yuan), and the operating profit reached 800 million yuan, which was also higher than the performance forecast of 200 - 700 million yuan.
Overall, although NIO had given a performance forecast in advance, the performance in the fourth quarter was still good, exceeding the upper limit of the performance forecast and the market expectation. The hot sales of the high - priced ES8 drove the significant increase in revenue and gross profit margin. Combined with NIO's strong cost - reduction and efficiency - improvement measures, the fourth - quarter performance comprehensively exceeded expectations.
Regarding the market's most concerned expectations for 2026:
① Although the sales volume guidance for the first quarter was lower than expected, the average selling price of cars implied in the revenue continued to increase significantly:
The sales volume guidance for the first quarter was 80,000 - 83,000 vehicles, lower than the expected 89,000 vehicles, implying a sales volume of 32,000 - 35,000 vehicles in March. However, compared with the 27,000 and 21,000 vehicles in January and February, a significant quarter - on - quarter recovery trend was observed. The overall delivery volume was lower than expected, presumably due to: a. The shortage of high - end audio chips for the ES8 led to the deferral of deliveries to Q2; b. The LeDao L90 faced a sales off - season, and there was a wait - and - see attitude before the launch of the new model L80 in the same series; c. Q1 was in a window period for new model launches; d. The pain caused by the macro - level reduction of purchase tax incentives.
However, in terms of revenue guidance, the revenue guidance for the first quarter was 24.5 - 25.2 billion yuan, higher than the market expectation of 24.5 billion yuan. When the sales volume was lower than expected, the revenue still exceeded expectations. Dolphin Jun believes that the core reason was the continued increase in the sales volume proportion of the high - priced ES8 (it is expected to increase from 32% in Q4 last year to 55% - 60% in Q1 this year), which drove the average selling price per vehicle (ASP) to increase significantly from 253,000 yuan this quarter to 265,000 - 270,000 yuan in the first quarter.
Regarding the gross profit margin of cars, which the market also cares about, although it is still facing the dual squeeze of "promotional discounts" (low - interest policies and a 5% purchase tax subsidy for LeDao) and "rising raw material prices" (the cost per vehicle increases by 4,000 - 5,000 yuan, dragging down the gross profit by about 1.6% - 2%), Dolphin Jun believes that with the strong offset of the continued increase in the proportion of the high - priced ES8, the decline in the gross profit margin of car sales is generally controllable. The specific guidance needs to be confirmed in the management's conference call.
② For the whole year of 2026:
The management previously gave an optimistic guidance of a 53% year - on - year increase in sales volume (about 500,000 vehicles) in 2026, with confidence stemming from the product boom starting in the second quarter:
NIO ES9 (to be launched in May and delivered in June): A new 5.4 - meter flagship, with the core technology of the ET9 applied. It is expected to enter the 400,000 - 450,000 yuan price range under the BaaS model and is expected to replicate the success of the ES8.
LeDao L80 (to be launched in April and delivered in May): As the five - seat version of the L90, it can accurately activate the incremental market in the 200,000 - 250,000 yuan price range with a lower threshold.
NIO ES7 (to be released in Q3): The five - seat version of the ES8, which will further consolidate the high - end market base.
For the existing models, the successful ES8 in 2025 will contribute a full 12 - month sales volume in 2026. At the same time, LeDao L60 and L90 will also launch new models.
Therefore, it can be seen that NIO's product pipeline in 2026 is relatively strong, which is also the source of the management's confidence in guiding the high - growth sales volume in 2026. The company's strategic focus has also clearly shifted to "large SUVs" and "high - end positioning".
Against the background that the new energy vehicle market in 2026 is dragged down by the reduction of purchase tax incentives (the expected growth rate is only 5% - 15%), the advantage of NIO's BaaS model is prominent. Since the battery is not included in the purchase invoice, the taxable price base is significantly reduced. This means that among the competitors in the same class, NIO users can bear a lower purchase tax, which can effectively hedge against the macro - level risk of the reduction of purchase tax incentives.
Similarly, NIO's guidance on gross profit margin and net profit margin is also optimistic:
NIO expects the gross profit margin of car sales to increase from 18% in the fourth quarter of 2025 to about 20% in 2026. The core factors for the increase include: the launch of the high - gross - profit NIO ES9 SUV, the cost reduction brought about by economies of scale (new models such as the LeDao L80 and NIO ES7 will further magnify the scale advantage), and the increase in the gross profit margin brought about by the upcoming facelift of the LeDao L60 SUV.
In terms of expenses, NIO is still strictly controlling costs: NIO expects the annual R & D expenditure in 2026 to be the same as the annualized level in the fourth quarter of 2025, and the proportion of sales and administrative expenses to revenue will drop to about 10%. With the increase in sales volume, the improvement of the gross profit margin of the whole vehicle, and the strict control of R & D and sales and administrative expenses, NIO's guidance indicates that it is expected to achieve annual profitability in 2026.
Overall, Dolphin Jun believes that NIO has proven its effectiveness in cost - reduction and efficiency - improvement in this quarterly report, which has driven the improvement of profitability and further enhanced organizational efficiency. NIO will enter a relatively strong product cycle in recent years in 2026. Although the sales volume in the first quarter is still under pressure due to the off - season in the industry, the resilience of the unit price and gross profit brought about by the optimization of the product structure has already been shown.
However, regarding the annual sales volume in 2026, although NIO can enjoy a certain buffer against the reduction of purchase tax incentives under the BaaS model and has a relatively strong product pipeline, with the expected year - on - year growth rate of the overall new energy vehicle industry only being 5% - 15%, the management's guidance of a more than 50% year - on - year increase to 500,000 vehicles is something that Dolphin Jun can only wait and see.
The following is a detailed analysis
I. The gross profit margin of car sales continued to rise significantly quarter - on - quarter
As the most crucial indicator every time the financial report is released, let's first take a look at NIO's profitability in car sales:
NIO previously guided that due to the significant increase in the delivery proportion of the high - priced NIO ES8 in the vehicle model structure in the fourth quarter (the gross profit margin of the ES8 exceeded 20%) and the release of economies of scale in the fourth quarter (the sales volume increased by 43% quarter - on - quarter to 125,000 vehicles), NIO's gross profit margin of car sales could increase to 18% in the fourth quarter. So the market's expectation was also set at 18.1%.
This time, NIO's actual gross profit margin of car sales was 18.1%, which was in line with the market expectation and the guidance. The gross profit margin of car sales also increased by 3.4 percentage points quarter - on - quarter. The core reason was the significant quarter - on - quarter increase in the average selling price of cars:
1) Unit price per vehicle: The average selling price of cars increased significantly in the fourth quarter, mainly due to the contribution of the high - priced ES8 in the vehicle model structure
In this quarter, NIO's average selling price of cars was 253,000 yuan, an increase of 32,000 yuan compared with 221,000 yuan in the previous quarter. This was mainly due to the contribution of the hot - selling and high - priced SUV ES8 in the vehicle model structure. In the fourth quarter, the proportion of the ES8 in the vehicle model structure increased by 27 percentage points quarter - on - quarter to 32%, which pushed up the overall average selling price of cars.
2) Cost per vehicle: The cost per vehicle increased by 20,000 yuan quarter - on - quarter, mainly because the production cost of the high - priced ES8 was higher
In the fourth quarter, NIO's cost per vehicle was 207,000 yuan, an increase of about 19,000 yuan quarter - on - quarter. This was mainly because the production cost of the high - priced ES8 was higher. However, NIO's successful cost - reduction strategy was verified again this quarter as the gross profit margin increased significantly quarter - on - quarter:
① Continuous cost reduction through platform - based and supply - chain cooperation: The third - generation platform (NT3.0) uses a 900V high - voltage architecture and regional controllers, achieving a high degree of hardware integration and reducing material and manufacturing costs.
NIO also reduced costs through the supply chain and self - developed technology (replacing the NVIDIA Orin - x chip with the self - developed NX9031, reducing the cost per vehicle by 10,000 yuan), enabling the gross profit margin of the ES8 to exceed 20% and that of the LeDao L90 (priced lower than its competitors) to reach 15% - 20%.
② Continued release of economies of scale: The sales volume of cars in the fourth quarter was 125,000 vehicles, an increase of 43% quarter - on - quarter. The economies of scale continued to be released, leading to a decrease in the amortized cost per vehicle.
3) Gross profit per vehicle: The gross profit per vehicle increased by 14,000 yuan quarter - on - quarter to 46,000 yuan
In the fourth quarter, NIO's gross profit per vehicle was 46,000 yuan, an increase of 14,000 yuan compared with 32,000 yuan in the previous quarter. The gross profit margin of car sales also reached 18.1% this quarter, continuing to increase by 3.4 percentage points quarter - on - quarter. The hot sales of the high - priced ES8, the economies of scale, and the continuous effectiveness of cost control jointly drove the increase in the gross profit margin of car sales in the fourth quarter.
II. The sales volume guidance is "lackluster", but the revenue guidance is good
1) The sales volume guidance for the first quarter is 80,000 - 83,000 vehicles, lower than the market expectation of 89,000 vehicles
Although the first quarter is the traditional off - season in the automotive market, and the reduction of purchase tax incentives has had a negative impact on the overall market sales volume, NIO effectively hedged some of the unfavorable seasonal factors with the ES8 reserve orders accumulated in the fourth quarter of last year.
NIO's latest delivery guidance for the first quarter is 80,000 - 83,000 vehicles (a year - on - year increase of 90% - 97%). Although this guidance shows a 34% - 36% quarter - on - quarter decline, compared with the 42% quarter - on - quarter decline in the same period