NIO Inc. Q4 FY2025 earnings call

• Vehicle delivery: In Q4 2025, 124,807 smart EVs delivered, up 71.7% year-over-year. Full year 2025 delivered 326,028 vehicles, up 46.9% year-over-year. January-February 2026 delivered 27,182 vehicles. First quarter expected deliveries 80,000 - 83,000, up 90.1% - 97.2% year-over-year. - Brand updates: New ES8 reached 70,000 deliveries in 160 days. ES9 to be launched in Q2 2026. Le Dao's L80 to be launched in Q2 2026, L90 and L60 to be upgraded. Envoy's L90 well received, L80 to be introduced in Q2 2026, L90 and L60 to be upgraded. Firefly ranked number one in high-end small car market for seven consecutive months in 2025. - Technology: Long-term investments in core technologies bearing fruit, such as automotive-grade 5-nanometer chip, full-domain vehicle operating system, SkyRide Intelligent Chassis. New version of future world model using closed loop reinforcement learning, smart driving time using increased by over 80% in February 2026. - Service network: Opened 171 future centers, 395 future spaces, 406 service centers, 75 delivery centers. Plan to expand into lower-tier markets through sky stores. - Charging network: Over 3,815 charging stations, more than 28,000 supercharging and destination chargers. Reached 100 million cumulative swaps milestone in February 2026. - Global layout: Focusing on deepening Chinese market while advancing global layout, Firefly including right-hand drive version in 10 countries, plan to expand overseas in 2026. - Chip company: Shenji completed first round equity financing of 22.57 billion RMB, recognized by industrial capital and market-oriented investment institutions.

In Q4 2025, vehicle margin reached 18.1%, driven by strong sales growth, higher mix of high margin models, and vehicle cost optimization. Margin of other sales reached 11.9% supported by expanding scale and improving profitability of services and community-related businesses. For full year 2025, total vehicles delivered were 326,028, up 46.9% year-over-year. In January-February 2026, 27,182 vehicles were delivered. First quarter expected deliveries between 80,000 - 83,000, up 90.1% - 97.2% year-over-year. Q4 2025 total revenues were 34.7 billion RMB, up 75.9% year-over-year and 59% quarter-over-quarter. Vehicle sales were 31.6 billion RMB, up 80.9% year-over-year and 64.6% quarter-over-quarter. Other sales were 3 billion RMB, up 36.6% year-over-year and 17.5% quarter-over-quarter. Overall gross margin increased to 17.5% compared to previous periods. R&D expenses were 2 billion RMB, decreased 44.3% year-over-year and 15.3% quarter-over-quarter. SG&A expenses were 3.5 billion RMB, decreased 27.5% year-over-year and 15.5% quarter-over-quarter. First quarter profit from operations was 0.8 billion RMB, net profit was 0.3 billion RMB, and positive operating and free cash flow were achieved with a balance sheet of 45.9 billion RMB cash and equivalents.

• First quarter expected deliveries between 80,000 - 83,000 vehicles, up 90.1% - 97.2% year-over-year. - 2026 to launch three new models, further improve product portfolio and expand share in premium large vehicle segment. - Continue investing in charging and swapping infrastructure, improve commercial operations of infrastructure network. - Further strengthen sales and service network. - Continue enhancing organizational changes, deepen organizational transformation, strengthen business system with ROI awareness and cost control. - Target full-year sales volume growth of 40% - 50%. - Target full-year non-GAAP operating profit break-even in 2026.

• External factors such as rising raw material costs, including memory chips, copper, lithium carbonate, which may impact vehicle margin. - Uncertainties in the auto industry backdrop affecting market growth and competition. - Impact of geopolitics on chip technology and related costs.

Q: About product and volume sales growth target, plan for second half and annual volume growth target.

A: Overall market challenging in first quarter, but new energy vehicles, especially battery electric vehicles, expected to grow strongly. In 2026, plan to launch ES9 in Q2, large five-seater SUV in Q3, Le Dao's L80 in Q2, etc. Confident of full-year volume growth of 40% - 50%.

Q: About autonomous driving, key technological highlights and differentiators.

A: Two key parameters are share of smart driving time and number of accidents mitigated/avoided. New version of world model with closed loop reinforcement learning, usage increased by over 80% in February 2026. Target two major releases in Q2 and Q4 2026.

Q: About first quarter margin guidance and receivable from related parties.

A: Vehicle growth margin in Q1 expected to be maintained at similar level as Q4 last year due to ES8 order backlogs and good product mix, but affected by rising raw materials, impact limited initially. Receivable from related parties mainly due to revenue of battery asset management company, with diversified financing channels.

Q: About raw material cost inflation pass-through and expense optimization.

A: Facing pressure from rising raw material costs, but large models more resilient, confident to mitigate impact. R&D investment in 2026 to be around 2 - 2.5 billion RMB per quarter, maintaining similar level as 2025, improving R&D efficiency.

Q: About profit and free cash flow in second half and chip strategy.

A: Confident of full-year non-GAAP operating profit break-even in 2026. Shenji's second chip is 5nm, more competitive, exploring external customers and mid-end chips.

Q: About ES9 compared to ET9 and energy replacement method.

A: ES9 has unique tech innovation, positioning different from ET9. Battery swapping is systematic solution to mismatched life cycles of vehicles and batteries, more efficient and has commercial value in energy storage and network interaction.

Q: About chip business and service business margin.

A: Second chip is 5nm, high performance, cost-effective, used in autonomous driving, etc. Service revenue gross margin in 4Q 11.9%, expected to continue improving in 2026 despite investment in infrastructure, profit from other cells can cover losses.

Q: About OPEX optimization and volume margin breakdown by brand.

A: SG&A expenses in Q4 reasonable due to sales growth and organizational efficiency, 2026 to control SG&A proportion to sales revenue within 10%. Difficult to give precise volume margin breakdown by model now, but long-term target for new brand 20% - 25% vehicle gross margin, AMO brand above 15%, Firefly brand above 10%.