Nio‘s Chief Executive Officer William Li provided his strongest signal yet that the company will report its first profitable quarter, telling employees to calculate the impact of 40,000 Gen-3 ES8 SUVs delivered with “solid gross margins.”
“Do the math, and you’ll see profitability is achievable,” Li said in an internal speech on Tuesday, according to a transcript shared by local media outlets.
Nio delivered over 43,600 ES8 vehicles between September 21 and the year end, reaching its internal target of surpassing 40,000 units.
The comments reinforce Li’s earlier confidence in fourth-quarter profitability despite the results remaining under audit.
The Shanghai-headquartered EV maker is expected to report its fourth-quarter 2025 financial results in early March.
Li described the anticipated result as “counter-cyclical growth — shifting from first-quarter losses to projected fourth-quarter profitability,” calling it Nio‘s entry into its “third development phase.”
“If a company cannot sustain operations, everything else is hollow and unsustainable,” Li said. “At this stage and scale, we must deliver this result.”
Gross Margin Target Met
Li confirmed the company achieved its vehicle gross margin target of 17% to 18% in the fourth quarter, a goal he had outlined during the third-quarter earnings call.
“Current indicators suggest this is achievable, as our current product gross margins are solid,” he said.
The ES8, Nio‘s flagship six- and seven-seat SUV, starts at 406,800 yuan ($58,300) and commands significantly higher margins than the company’s mass-market Onvo vehicles.
Growth Outlook
Looking ahead, Li said he is confident Nio can achieve 40% to 50% annual sales growth over the next three to five years — up from approximately 30% during its second-generation product cycle.
“We now operate three brands, with many more competitive products set to launch,” Li said, referring to the premium Nio brand, mass-market Onvo, and affordable Firefly sub-brands.
Nio delivered 326,028 vehicles globally in 2025. Li noted the company’s market share in China remains below 2%, representing “at least fivefold room for growth.”
Non-Automotive Revenue
Li highlighted strong performance in non-automotive businesses, saying revenue from merchandise, the company’s car mall, and external technology collaborations has “the potential to exceed RMB 10 billion” ($1.43 billion) in 2026.
“Not only must the gross margins for vehicles improve steadily, but so must the gross margins for non-automotive businesses,” he said.
Three New Models
Nio plans to launch three new models in 2026, led by the flagship ES9 SUV.
China’s Ministry of Industry and Information Technology published the first official images of the ES9 last week, revealing a vehicle measuring nearly 5.4 meters.
The SUV is expected to be showcased at the Beijing Auto Show in late April, with deliveries beginning in the second quarter.
Smart Driving Investment
Despite acknowledging tight finances, Li said he has allocated a special computing power budget for the smart driving department.
“This year, we will release three major versions and reclaim our position as an industry leader,” he said.
Mindset Warning
Li cautioned employees against complacency following the anticipated profitable quarter.
“2026 will bring many challenges, but I believe the greatest challenge lies not in the market, products, or sales — it’s our mindset,” he said. “Now that we’ve caught our breath, this mindset may shift slightly.”
He reminded staff that Nio remains a startup: “We must fortify our positions, wage persistent battles, advance steadily day by day.”
