Back to a trillion-dollar market cap! Li Bin "breaks down" NIO

【Briefing】Nailing its first quarterly profit target, NIO CEO Li Bin breaks down the reasons behind it

“Profitability is only a new starting point and also a breakthrough at a given stage. We are very clear that competition in the auto industry is extremely fierce.” At a media briefing held on March 11, NIO’s founder, chairman, and CEO Li Bin told outlets including China Fund News.

NIO has repeatedly promised that it will achieve its first quarterly profit in the fourth quarter of 2025. On the evening of March 10, NIO officially announced that its adjusted operating profit (non-GAAP) for Q4 2025 was 1.25B yuan, and its operating profit was 807 million yuan.

In the interview, Li Bin broke down NIO’s vehicle business and non-vehicle business in detail, discussed and forecast development trends in the new energy vehicle industry, and acknowledged that NIO is able to take part in the fierce market competition ahead.

On March 11, NIO’s Hong Kong-listed shares surged by more than 17% at one point, with its total market capitalization once again crossing the 100 billion Hong Kong dollar threshold. By the close of trading on the morning of March 12, NIO’s share price in Hong Kong was 43.92 Hong Kong dollars per share, and its total market capitalization reached 108.7 billion Hong Kong dollars.

All-electric ushers in a golden era

“First-quarter profitability fully confirms NIO’s technology roadmap, products, and business model, and shows that it has core competitiveness.” Li Bin said.

Among many new energy vehicle makers, only NIO and Tesla focus on an all-electric technology roadmap for new energy vehicles.

Looking back at 2025, NIO’s full-year deliveries increased year over year by 46.90% to 326k units, including deliveries in Q4 2025 up 71.70% year over year to 124.8k units.

In terms of specific models, NIO’s all-new ES8 launched in the second half of 2025 has continued to set records for monthly deliveries for all-electric models priced above 400k yuan.

NIO co-founder and president Qin Lihong said that the delivery of the all-new ES8 reaching its 80,000th vehicle cumulatively will be achieved in late March.

“Pure electric is entering a golden era.” Li Bin said that growth in China’s 2025 new energy vehicle market is mainly driven by pure-electric models, and NIO, which focuses on the pure-electric technology roadmap, is moving in step with market trends.

2025 is a pivotal year for the development of high-end all-electric vehicle models in China. Previously, the penetration rate of pure-electric models in China’s high-end auto market had been rising slowly, but in 2025 it showed a clear increase.

In the interview, Li Bin emphasized that in China’s high-end auto market above 300k yuan, the penetration rates of pure-electric models in Q4 2024 and Q4 2025 were 14% and 27%, respectively.

Benefiting from the development of the high-end all-electric market, NIO’s auto gross margin for Q4 2025 reached 18.1%, up 5 percentage points year over year and up 3.4 percentage points quarter over quarter.

Source: NIO’s announcement

Li Bin said that the benefit of sticking to an all-electric technology roadmap is that the efficiency of R&D, sales, service, and management is all very high.

“In the next few years, the penetration rate of pure electric in the new energy vehicle market will increase.” Li Bin said that NIO will continue to follow the development trend of pure electric and leverage its advantages in “charge, swap, and upgrade” built into new energy infrastructure.

Bringing up the value of the non-vehicle business

Discussing competition factors in the high-end new energy vehicle market

When breaking down NIO’s Q4 2025 business, Li Bin specifically mentioned that the sales gross margin of the non-vehicle business was 11.9%, which carries very high value.

NIO’s non-vehicle business is also known as service and community operations based on vehicle ownership, including after-sales service, NIO Life, finance, insurance, and technical services, among others. It is very important for NIO to close the business model loop.

It is understood that in NIO’s business model, many costs are borne by the non-vehicle business rather than the vehicle side. However, this business has been profitable for three consecutive quarters in 2025 and has achieved full-year profitability.

At the same time, NIO’s non-vehicle business revenue in 2025 exceeded 10 billion yuan, accounting for 12% of total revenue. As NIO’s owned users increase, this business’s revenue will continue to grow.

In Li Bin’s view, changes in NIO’s non-vehicle business are more worth paying attention to than its profitability in Q4 2025, and are also one of NIO’s core competitive strengths in the high-end new energy vehicle market.

In the high-end new energy vehicle market, NIO is one of the earlier entrants, but now multiple automakers have moved into this market and have rolled out models priced above 500k yuan one after another.

Li Bin said that for users in the high-end market who buy a car, automakers need to provide an end-to-end service system, covering the purchased vehicles as well as many services beyond the vehicles.

“I think a full journey experience that goes beyond expectations is still very important.” Li Bin said that if you only compare product parameters and performance, many new energy vehicles now show a trend toward homogenization; the real difference lies in the emotional experience.

According to the website, NIO is committed to creating a pleasant way of life for users by providing high-performance intelligent electric vehicles and an extreme user experience.

Li Bin said that even if NIO increases its investment in building 1,000 swap stations in 2026, it is still expected that the profitability of NIO’s non-vehicle business will improve.

Maintain the full-year profitability target for 2026

Raw material cost increases remain manageable

After achieving the first quarterly profit target, NIO intends to meet its goal of achieving its first annual profit in 2026.

“From an operational perspective, of course we need to achieve full-year profitability, and this is very firm.” Li Bin said. 2026 will be the first year for NIO to enter its third stage of development, and the goal remains achieving full-year profitability.

Compared with the goal of achieving its first full-year profit, NIO’s sales growth target for 2026 is to grow by 40% to 50% year over year.

Li Bin said that NIO has already gone through the development stage focused on achieving a big increase in sales. Now, the core is to focus on operating quality, and it will not sacrifice investment in long-term development.

For 2026, NIO has clearly identified two long-term-development-based investments: building 1,000 swap stations, and keeping R&D spending at 2 billion to 2.5 billion yuan each quarter.

The issue is that in 2026, the auto industry faces the challenge of rising raw material prices. In addition to price increases, storage chips also face a shortage in supply.

The outside world is watching what measures NIO will take to achieve its full-year profitability target for 2026.

Li Bin said that NIO will set out the current operating goals and has already taken factors such as raw material price increases into consideration. After that, the company will continue to deepen cooperation with the upstream supply chain and discuss how to implement a more agile response mechanism.

“This year, we still don’t need to do anything in particular. We can handle it.” Li Bin said that given the current situation of rising raw material prices, it is forecast that the impact remains within a range NIO can bear, so there is no need to pass the pressure on to consumers.