After losing 100 billion yuan, NIO has finally turned profitable | DeepKr

Up to now, Old Zhou still can't believe that at this time last year, he was lingering around NIO's office, urging the company to pay the payment every day, as "his boss was extremely worried that NIO would go bankrupt". Now NIO ships 20,000 to 30,000 sets of products every month, and has become one of their major customers.

Experiences like Old Zhou's are very common in NIO's supply chain.

An interior supplier told 36Kr that last year his company was extremely anxious about NIO facing a liquidity crisis, and kept pushing NIO to settle the mold fees as soon as possible. However, NIO was short of funds at that time, and finally paid off the debt with dozens of Firefly vehicles, as well as some LeDao L60 and NIO ES6 units. Some suppliers tried to avoid doing business with NIO back then, so they quoted an extremely sky-high price when NIO inquired for quotations, to turn NIO away directly.

Suppliers' concerns were not unfounded. Over the past 10 years, NIO's publicly disclosed cumulative losses have reached about 100 billion yuan. As of the middle of last year, its released financial report still showed a single-quarter loss of 5 billion yuan. With the successive collapses of Jiyue and Neta, the market's speculation about the next automaker to face a liquidity crisis naturally targeted NIO.

Even Li Bin, the founder of NIO, said: "It is estimated that less than 1% of people believe NIO can make a profit."

But NIO has achieved that 1% possibility.

On September 1, NIO released its latest quarterly report, recording a profit of 26.1 million yuan under the non-GAAP financial standard — which means it has been profitable for three consecutive quarters since the fourth quarter of last year.

In the sluggish automotive market this year, this result seems very unusual.

The first pressure is that since the first half of this year, the prices of memory chips, batteries and other components have risen sharply, leading to a general increase in supply chain costs for automakers. The second pressure is the phasing out of subsidies, which has cooled consumers' willingness to buy. According to the data of China Passenger Car Association, the year-on-year decline in domestic passenger car sales in the first half of this year was about 20%.

Even the former "top performers" such as Seres and Li Auto have slipped from profitability to losses, while NIO has become one of the rare companies that buck the trend.

Compared with NIO's past performance, this is also very unusual: it only took one year to turn around from an annual loss of 20 billion yuan to profitability.

"Bin Ge always manages to survive in desperate situations," a long-time NIO employee sighed to 36Kr. In the past few years, NIO has been on the verge of operational collapse several times due to continuous loss-making, but Li Bin could always raise huge new funds from outside to pull the company back from the edge. For a long time, NIO was trapped in the cycle of "expansion, crisis, financing, expansion".

But this time it is different. Li Bin abandoned his past path dependence of relying on financing to sustain the company, and shifted his focus from "external fundraising" to "internal optimization": reshaping product concepts, improving operational quality of every link, strictly controlling costs and expenses, and focusing on the supply chain — which helped NIO complete a radical transformative reform to achieve profitability and self-sufficiency in cash flow.

This extreme reversal from loss to profitability seems to have happened miraculously within one year. But from the perspective of breaking the past product shackles and rebuilding automotive product competitiveness, NIO has been preparing for this "profit battle" for 4 years.

Monthly sales doubled: Let go of product obsessions, build a "battery-swappable Li Auto-style" product line

"Whoever wants to make a large screen can go to work at Li Auto," a former NIO senior executive recalled to 36Kr. In the early product meetings, Li Bin once rebuked employees who proposed the idea of installing large screens in cars in this way.

At that time, Li Bin probably did not expect that several years later, the popular new NIO ES8, ES9, LeDao L90 and other models would be jokingly called "battery-swappable Li Auto" by netizens. Because these models share unified core selling points: large size, spacious interior, rich configurations, especially the refrigerator, smart screen, and zero-gravity seats that were popularized by Li Auto — all of these configurations are fully installed in NIO's new vehicles.

"The ES8 has a relatively spacious interior, so the whole family won't feel crowded when using the car," said an owner who just bought this model. Compared with the price of 500,000 to 600,000 yuan for the second-generation ES8, the third-generation ES8 is priced at more than 400,000 yuan, which he thinks is "very cost-effective".

The effect of the "battery-swappable Li Auto-style" positioning is immediate. After the improved new products were launched in August last year, NIO's monthly sales rose sharply, once approaching 50,000 units, doubling year-on-year. In particular, the large SUV ES8 became the best-selling new energy vehicle above 400,000 yuan in some months. Even when the automotive market is in a downturn this year, NIO still maintains a monthly sales volume of about 30,000 units.

Before that, NIO's vehicles had long been trapped in the dilemma of large body size but small interior space, short battery range, and low cost performance, leading to stagnant sales. The root cause is that in product definition, NIO adhered to many "obsessions" that deviated from the mainstream needs of users.

Whether to install large screens and multiple screens in the car is a typical example. Li Bin, who graduated from Peking University with a sociology major, has his own understanding of family education. He has expressed in public and internal occasions that "I don't want my children to sit in the car and look at so many screens". Therefore, before 2025, NIO's vehicles were only equipped with one vertical central control screen in the cockpit.

Even to solve the problem of no large screen in the car, NIO took a roundabout way to promote AR glasses to car owners, allowing users to watch dramas with AR glasses in the car.

A NIO employee recalled that in order to justify this decision, Li Bin listed a series of evidences including the market share of AR glasses, the user experience of AR glasses, the cost and portability of AR glasses, to demonstrate that AR glasses would replace in-vehicle screens. But later facts proved that the entire AR glasses industry is still in the early stage of development. "This is a typical case of making another wrong decision just to make up for one previous mistake."

"Large body but small interior space" has long been a common complaint from the market about NIO's vehicles, and it is almost a fatal defect for current electric vehicles. This problem comes from another obsession of NIO: design first.

One of NIO's brand labels is "excellent design taste", and the company's design-driven concept contributes most to this reputation, so designers have very high decision-making power in NIO. However, good appearance and practicality are always difficult to achieve at the same time. For automobiles, the exquisitely proportioned shape design often conflicts with the interior space efficiency, and NIO was trapped in such a dilemma in its early stage.

A NIO employee told 36Kr that when the body size of the second-generation flagship ES8 was designed, the original plan was to make "1.8 meters of space in the front row, 1.8 meters of space in the back row, and 3 fists of legroom in the second row", which could ensure that when the leg rest on the queen's co-pilot is raised, the user's feet will not be stuck.

But the designer of the second-generation ES8 rejected this idea on the grounds that after lengthening the wheelbase and body length, the overall appearance of the car would not be exquisite enough. As a result, "the third row of the second-generation ES8 is too narrow for adults to sit comfortably, and there is no front trunk, so the storage space is also insufficient."

"In addition, the wheelbase was shortened, but the car was equipped with large 22-inch wheels, so that the second-row seats of the second-generation ES8 cannot be fully flattened, which greatly affects the riding comfort experience." This problem once led the person in charge of the seat project to resign.

Secondly, premature adaptation to the European market also limited the design of NIO's vehicles. The second-generation ET5 is a personalized coupe of NIO targeting Tesla Model 3. The similar Xiaomi SU7 still has a monthly sales volume of nearly 20,000 units, but NIO's second-generation ET5 has remained tepid for a long time.

A NIO insider told 36Kr that a major shortcoming of this car is that "the front engine compartment is too short", "this model is deeply designed to meet the needs of the European market, and the BMW 3 Series and Mercedes-Benz C-Class that ET5 targets are not lengthened in Europe."

All kinds of early product obsessions have become shackles for NIO to capture the mainstream demand of the Chinese market. Relying on large interior space, refrigerator, smart screen and zero-gravity seats, competing brands have achieved monthly sales of 10,000 units for a single model, while NIO's ES8 with the same positioning has long been hovering at around 1,000 units per month.

Even later cross-border car-making brands such as AITO and Xiaomi have begun to reach a monthly sales scale of 30,000 units, while NIO, which has more than 10 models in its product line, is still struggling at around 20,000 units per month.

Those who tried to educate the market will eventually be educated by the market. NIO invested huge sums of money in building the second-generation platform (NT2), but it has never produced any hit model. Li Bin finally realized the cost of "making products while ignoring market demand". According to 36Kr's understanding, in the second half of 2022, shortly after the second-generation platform was delivered, Li Bin led the company's senior management to hold consecutive product review meetings, aiming to find out the reasons for the failure of the second-generation platform products.

A former NIO senior executive told 36Kr that the unanimous consensus reached at the meeting was that the products were "not down-to-earth", and did not really consider issues from the perspective of users and the market.

"Take the in-vehicle screen as an example, should we make the screen we want, or the screen the market needs?"

Even when it comes to the latest third-generation platform, Li Bin was still hesitant about the attitude towards large screens. An employee close to Li Bin revealed that during the product definition process of the latest generation, Li Bin struggled with the in-vehicle screen configuration for a long time, but finally compromised. The third-generation flagship SUV ES8 is equipped with five or six screens.

With the addition of multiple screens, NIO also enlarged the shape and interior space of the vehicles, and added configurations such as refrigerators and multiple zero-gravity seats. Only then did NIO's new generation of platform models find the password to boost sales.

On September 20, 2025, the third-generation NIO ES8 was launched. Its more aggressive body size, longer wheelbase, and large-capacity front and rear trunks gave Li Bin enough confidence to shout the slogan of "can be a perfect substitute for MPV" at the launch conference.

Another NIO insider told 36Kr that in fact, the third-generation NIO ES6 was originally planned to be released in 2026. But last year, NIO's internal assessment showed that the existing product competitiveness of this model was insufficient. Considering that the five-seat version of the ES8 has been launched this year, the release time of the ES6 was postponed to 2027. "The insufficient product competitiveness mainly refers to the fact that the body size is not large enough."

The current market competition is more intense than imagined, so NIO would rather postpone the launch for one year, enlarge the body size, and add configurations such as zero-gravity seats.

The experience that "larger vehicles are easier to sell" is not only used by NIO to define SUV models, but also replicated to the personalized coupe model ET5.

36Kr learned that NIO plans to lengthen the body and wheelbase of the third-generation ET5. The rear space of the ET5 next year is expected to achieve a qualitative leap, and the new car will focus on sporty performance while taking into account the family use demand in the rear row.

The deeper change lies in the logic of product definition. A NIO insider said that in the past, when defining products, NIO simply took Mercedes-Benz and BMW as the benchmark, "and thought relatively less about who the cars are sold to."

Now, NIO's product definition learns more from the most successful model cases in the current industry. When defining a car, it also thinks about what its target groups want. "When defining the third-generation vehicles, NIO first divided the customer groups into three categories: for me (self-pleasure), for business, and for family, and then made product definitions based on these segmented scenarios."

Fortunately, the "harmonious internal atmosphere" in the company coincided with the "favorable timing" of the accelerated penetration of pure electric vehicles, which further magnified the revenue of NIO's third-generation vehicles.

The improvement of battery swapping and charging infrastructure and the popularization of ultra-fast charging technology have quickly alleviated users' energy replenishment anxiety for electric vehicles, and promoted the rapid growth of pure electric vehicle sales. Data from China Passenger Car Association shows that in 2025, the sales volume of pure electric vehicles increased by more than 24% year-on-year, outpacing the overall growth rate of new energy vehicles, and also exceeding the growth rate of plug-in hybrid vehicles including extended-range electric vehicles.

Since the beginning of this year, the rise in oil prices has further boosted the growth of pure electric vehicles. A senior executive of an automaker told 36Kr that the sales of fuel vehicles of his company "plunged by 50% in the first half of the year, which caught us completely off guard and was totally out of our expectation."

After NIO completed a series of reflections and adjustments around product definition, superimposed on the upward trend of the pure electric vehicle track, its third-generation vehicle products began to achieve good market performance.

On August 21, Li Bin released good news on his WeChat Moments: on the first anniversary of the debut of the third-generation ES8, the 140,000th unit of this model was delivered. The latest flagship SUV ES9 also achieved a cumulative delivery of more than 20,000 units within 73 days after its launch.

At the same time, a storm of refined operation for profitability has penetrated every layer of the company.

Seek revenue externally, NIO transforms into a "component supplier"

Last year, Li Bin said at an internal meeting: "Every sum of money, every position, every project, and every fixed asset investment must have someone paying for it. You can either make money from outside, or make money through internal optimization."

NIO's way of making money from outside is not only to sell more cars, but also to transform itself into a human resources outsourcing company and a component supplier.

"Now as long as the business volume exceeds 2 million yuan, Bin Ge will try his best to fight for it," a NIO management member told 36Kr.

"Many employees are working on outsourcing projects." A NIO employee gave some examples to 36Kr. Some employees in the company went to Europe at the beginning of this year to help a supplier win a bid from an overseas automaker. If they succeed, "NIO can earn several million yuan from this business."

Some employees are developing APP for China Mobile. "It is estimated that we can only earn 700,000 to 800,000 yuan, but Bin Ge thinks it is a considerable income," and this sum of money is net profit for the company, because NIO has already paid the labor cost.

In addition to selling labor services, NIO also sells technologies, and it "wants to sell all kinds of technologies".

Among NIO's numerous technology stacks, the chip business has brought huge revenue to the company.

NIO's chip subsidiary, Shenji Technology, has initially opened up the external supply market. According to 36Kr's understanding, NIO's Shenji chip has obtained the designated order for edge inference projects from the Hefei government.

Last year, Shenji Technology and Axera established a joint venture called Chongqing Zhiyuan. An industry insider close to Axera told 36Kr that the external supply of chip technology has brought hundreds of millions of yuan in technology licensing fees to NIO, and if the chip shipment volume increases, NIO's revenue will further expand.

At present, the first assisted driving chip M97 jointly developed by Shenji Technology and Axera is expected to enter Geely's supply chain. Geely's initial plan is to use the dual M97 solution to develop L3 autonomous driving business. Leapmotor