Chinese premium electric-car maker Nio Inc. reported revenue that missed estimates and a bigger-than-expected loss as it continues to weather a bruising price war.

NIO Q3 earnings call: NIO is confident of doubling sales next year and aims to be profitable by 2026. The third brand is officially named Firefly and its first model will begin deliveries in the first half of 2025.

NIO stock jumped 3.5% in morning trading, reversing initial losses.

Revenue rose to 18.7 billion yuan ($2.6 billion) in the three months ended Sept. 30 after the company delivered a record 61,855 cars in the quarter, still short of analyst estimates of 19.2 billion yuan. It reported a 4.4 billion yuan adjusted net loss for the quarter, according to a statement Wednesday, more than the 4.3 billion yuan projected by analysts.

Revenue from vehicle sales saw a slight decrease over the third quarter of 2023, mainly due to changes in the product mix lowering the average selling price, which was partially offset by the increase in delivery volume. Nio’s gross margin grew to 10.7% from 8% a year earlier, roughly in line with estimates.

Nio aims to deliver between 72,000 and 75,000 vehicles this quarter.

Chief Financial Officer Stanley Yu Qu said he expected future models to help improve the EV maker’s financial performance.

“Starting next year, our three brands are poised to embark on a robust product cycle, projected to elevate the company’s sales volume to new heights. We expect this momentum will drive continued improvements,” he said.

The automaker aims to deliver between 72,000 and 75,000 vehicles this quarter, short of analyst estimates of 77,950. Revenue is likely to increase to between 19.7 billion yuan and 20.4 billion yuan in the fourth quarter, the company said, short of analyst expectations of 22.5 billion yuan.

Nio’s third-quarter results show the impact of a bruising price war started by Tesla in the Chinese EV market, with most automakers forced to discount their vehicles or throw in more freebies to protect market share. Although initially resistant, Nio also followed suit by slashing the prices of their vehicles by up to 30,000 yuan last year.

Nio’s mass market Onvo brand has been well received since its launch in May, with tens of thousands of orders for the L60 electric sport utility vehicle. While deliveries, which started in September, have been slow because of the time it takes to ramp up production, Chief Executive Officer William Li has said he hopes monthly shipments can reach 10,000 in December and double to 20,000 by March, according to Chinese media reports.

The company is one of the last few EV makers in China that remains committed to producing only battery electric cars, with many rivals, including Xpeng Inc., Zeekr and Avatr Technology Co., planning to develop extended-range EVs, which come with a small internal combustion engine to recharge the battery.

This means the Shanghai-based company will lose out in the popular and profitable hybrid segment, which is outpacing pure-play EVs.

Nio also stands out with its battery-swapping service, which it says can change a dead battery for a fully charged one in three minutes, beating the long charge times of other EVs. However, the battery-swapping stations are expensive to build and Nio’s R&D costs reached 3.3 billion yuan in the third quarter, up 9.2% from a year earlier.