Summary: NIO Inc. will release its third-quarter earnings report before market open on November 25. With significantly rebounding delivery volumes and gradually recovering gross margins, the market holds positive expectations for NIO's performance.
Last Quarter Review
In Q2 2025, NIO reported revenue of RMB 19.0 billion (approximately US$2.65 billion) with a net loss of RMB 4.99 billion (approximately US$700 million). Vehicle deliveries reached 72,056 units, representing a 25.6% year-over-year increase from Q2 2024 and a 71.2% quarter-over-quarter growth from Q1 2025. Deliveries consisted of 47,132 premium smart electric vehicles under the NIO brand, 17,081 family smart electric vehicles under the Ledao brand, and 7,843 premium compact smart electric vehicles under the Firefly brand.
Current Quarter Expectations
NIO anticipates Q3 2025 deliveries between 87,000 and 91,000 vehicles, representing year-over-year growth of 40.7% to 47.1%. Total revenue is projected at RMB 21.81 billion (approximately US$3.05 billion) to RMB 22.88 billion (approximately US$3.19 billion), indicating a 16.8% to 22.5% annual increase.
According to Tiger Trade, analysts expect NIO's Q3 revenue to reach RMB 22.13 billion, an 18.49% year-over-year increase, with EPS at -US$1.653 (a 22.76% improvement) and adjusted EBIT at -RMB 3.519 billion.
Key Highlights
Delivery Ramp-up and Model Portfolio Optimization
Ledao L90 exceeding 10,000 units in its first month and strong orders for the new-generation NIO ES8 provide a solid foundation for subsequent quarters. With Ledao and NIO brands covering different price segments, the more balanced model portfolio enhances overall sales volume and revenue stability.
Increased delivery scale significantly dilutes fixed costs per unit. Combined with previously disclosed cost-efficiency measures, operating losses are expected to further narrow. Should vehicle gross margin sustain mid-teen levels and gradually improve, it would positively impact cash flow and income statements.
Persistent price competition and initial model expansion investments may constrain short-term margin flexibility. The company's Q4 gross margin improvement target remains contingent on supply chain stability and key component cost optimization.
Dual-Brand Synergy and Ecosystem Expansion
The Ledao brand rapidly scaled through value-oriented pricing, while NIO consolidated its premium technology leadership position. This dual-brand synergy broadens market coverage. Management's organizational optimization and CBU mechanism implemented since Q2 strengthen ROI control, contributing to financial improvement.
Overlapping product cycles and production ramp-up will sustain revenue and order momentum this quarter. Shared ecosystems in BaaS, battery swapping, and service infrastructure enhance user stickiness and repurchase rates, generating long-term value.
Medium-term expansion in midsize/large SUV and mainstream family segments could elevate vehicle gross margin through increased component standardization and proprietary R&D integration, potentially enabling an operational inflection point.
Gross Margin Recovery and Expense Optimization
Last quarter's gross margin reached 9.98%, improving from Q1. The company aims to enhance margins through model mix optimization, component standardization, and in-house chip adoption. Mass production of Ledao L90 and new ES8 may boost component reuse rates to reduce costs.
R&D and SG&A expenses showed sequential optimization in Q2. Should scale effects from accelerated deliveries continue, operating expense ratios may further decline this quarter, driving year-over-year EBIT and EPS improvement (projected: 27.17% EBIT improvement, 23.32% EPS improvement).
Risks include raw material price volatility and supply chain constraints potentially limiting cost improvements, while ongoing price wars may pressure per-unit margins, requiring efficiency gains and service monetization to offset.
Analyst Views
Multiple institutions and media outlets from early September to mid-November 2025 commented on NIO's Q2 results and Q3 guidance, converging on themes of "significant delivery rebound, gradual margin recovery, challenging Q4 profitability targets." Analyses generally highlight Ledao L90 and new ES8 volume contributions to revenue and margins while monitoring cost-reduction sustainability.
Target price assessments show considerable divergence post Q3 guidance: Some institutions maintain ratings citing sustainable scale effects despite profit headwinds from competition and spending, while others remain cautious about achieving Q4 profitability. Consensus indicates target price adjustments hinge on whether vehicle gross margin can stabilize in mid-teens with upward trajectory, and whether Q3 revenue/EPS meet market expectations.