Nio will likely achieve its goal of reporting non-GAAP profit in the fourth quarter, driven by reduced research and development (R&D) expenses and surging deliveries of its high-margin ES8 SUV, according to Deutsche Bank analyst Bin Wang.
The Shanghai-based EV maker expects vehicle gross margin to reach approximately 18% in the fourth quarter, Wang wrote in a research note Monday.
The improvement — from 13.9% in the third quarter of 2024 and from 10.0% in Q2 — reflects a favorable product mix with significant ES8 deliveries, the analyst said.
When Nio reported third-quarter results last week, R&D expenses totaled $335.8 million, down 28.0% year over year and 20.5% from the second quarter.
The company attributed the decline to lower “personnel costs in research and development functions primarily as a result of organizational optimization, and the decreased design and development costs resulting from different stages of development for new products and technologies.”
Chief Executive William Li provided additional context during a media Q&A session held a day after the earnings release.
“Fundamentally, the CBU model directs us to prioritize high-return, high-priority projects, so while spending decreased, output remained comparable,” Li said.
Target Maintained
Despite having trimmed its fourth quarter delivery target from 150,000 to 120,000-125,000 units, the chief executive reaffirmed the profitability goal.
Initially, the company aimed to double vehicle deliveries in 2025 to more than 440,000 units.
ES8 Ramp Up
Deutsche Bank’s analyst said the Group’s best selling model ES8 is on track to reach Nio‘s 2025 sales target of 40,000 units, with a projected 33,000 units in the fourth quarter alone.
Last week, the company’s Marketing Vice-President Kang Kai said the team hoped “the ES8 delivery target can reach 10,000 units, making it the fastest-produced car in Nio‘s history.”
Commenting on the December figures, the executive teased another major production push.
“For December, we hope production can reach 20,000 units,” Kai stated.
The company delivered its 20,000th ES8 unit over the weekend, 70 days after initial deliveries began across more than 40 Chinese cities.
Nio reached the first 10,000 deliveries in 41 days, benefiting from a prepared backlog that accelerated the timeline between order acceptance and customer delivery.
The official launch event took place on September 20 in Hangzhou with the first deliveries starting less than 24 hours later across 44 cities.
The EV maker’s other sales and services segment is expected to maintain consistent revenue and gross profit compared with the third quarter, according to Deutsche Bank.
Nio reported third-quarter gross margin of 13.9%, up from 10.7% in the year-earlier period and 10.0% in the second quarter of 2025.
Stock Performance
As of press time, Nio‘s US-listed shares were trading 1.50% lower during Tuesday’s pre-market session at $5.18.
Despite the recent pullback, the stock is still 18% up year to date.
The Hong Kong-listed shares dropped by 6.7% on Tuesday, closing at a new low since late August.
