NIO Inc. released second-quarter financial results on September 1 that demonstrated significant progress in profitability. Vehicle deliveries across its three brands increased 49.4% year over year to 107,658 units, while the company’s net loss contracted 89.4% to RMB 0.5 billion. The automaker achieved its third consecutive quarter of adjusted profitability, marking a turnaround from earlier performance.
The improvement was driven by a favorable shift in product mix rather than volume alone. Vehicle gross margin expanded to 18.5% from 10.3% year earlier, with overall gross margin rising to 18.4% from 10%. The NIO brand’s average selling price reached RMB 430,000 in July, positioning it above comparable Mercedes and BMW models in the Chinese market. The flagship ES8 model reached 140,000 cumulative deliveries in 335 days, the fastest pace in its price segment. The newer ES9 model attracted primarily new customers, with 75% of buyers new to the NIO ecosystem, while the ONVO brand’s L90 model achieved 60,000 first-year deliveries, leading its segment.
Infrastructure investments bolstered the company’s competitive position. NIO operates over 4,100 power swap stations globally, with the fifth-generation model costing RMB 1.4 million to construct, RMB 100,000 less than its predecessor. A software upgrade deployed June 18 increased urban smart-driving mileage by 92.8%.
Costs presented a significant headwind. CFO Stanley Qu identified a roughly RMB 14,000 per-vehicle cost increase driven by rising chip, battery, and raw material prices. Selling, general and administrative expenses climbed 11.6% year over year to RMB 4.4 billion despite research and development spending declining 28.7% to RMB 2.1 billion. The company planned RMB 6 billion to RMB 7 billion in capital expenditures for the full year.
Despite higher revenues of RMB 32.1 billion, adjusted net profit totaled just RMB 26.1 million. Third-quarter guidance projected 108,000 to 111,000 vehicle deliveries, marginally above second-quarter actuals. As of September 9, shares traded at a forward price-to-earnings ratio of 67.11, reflecting market expectations for sustained growth substantially exceeding current profitability levels. Hedge fund ownership decreased from 31 to 27 funds in the quarter, while short interest represented 6.49% of the float.
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