NIO achieves quarterly profit for the first time! Approved granting of 248 million share-based incentives to Li Bin and setting a trillion-dollar market cap target

NIO Achieves First Quarterly Profit

On March 10, NIO (NIO.US, 09866.HK) released its financial results for Q4 and the full year of 2025. In Q4, the company achieved revenue of 34.65 billion yuan, a year-over-year increase of 75.9%, setting a new record. Net profit for the quarter was 283 million yuan, marking the company’s first-ever quarterly profit since its founding. In comparison, the same period in 2024 saw a net loss of 7.112 billion yuan; non-GAAP adjusted net profit was 727 million yuan, compared to a net loss of 6.622 billion yuan in the same period last year.

For the full year of 2025, NIO achieved total revenue of 87.49 billion yuan, a year-over-year increase of 33.1%, also a record high. The full-year net loss was 14.943 billion yuan, a 33.3% reduction in losses compared to the previous year; adjusted net loss was 12.414 billion yuan, a 39.4% decrease.

Regarding gross margin, the financial report shows that NIO’s comprehensive gross margin in Q4 was 17.5%, up 5.8 percentage points year-over-year and up 3.6 percentage points quarter-over-quarter, reaching a new high since 2022. The vehicle gross margin for the quarter was 18.1%, an increase of 5 percentage points year-over-year and 3.4 percentage points quarter-over-quarter, the highest in three years.

NIO stated that its Q1 2026 delivery guidance is between 80,000 and 83,000 units, representing a year-over-year growth of 90.1% to 97.2%. Revenue guidance is between 24.48 billion and 25.18 billion yuan, a year-over-year increase of 103.4% to 109.2%.

“Confident in 40%-50% Growth for the Full Year”

NIO founder, Chairman, and CEO William Li said during the earnings call that the Chinese passenger car market in the first quarter will face significant challenges, with slight declines compared to last year. However, he believes that growth in pure electric models is very strong, driven by the entire new energy vehicle sector last year. This year, pure electric models are expected to continue their rapid growth.

He noted that the large three-row and five-seat SUV markets are entering a “golden era” for pure electric vehicles. Since September 2025, pure electric large three-row SUVs have led all energy types in sales for five consecutive months. In the second half of 2025, sales of pure electric large three-row SUVs increased by over 350% year-over-year, while extended-range models declined by 6%.

He introduced that NIO will develop three new models this year. The flagship ES9 tech executive SUV will launch in Q2, a new five-seat SUV based on the all-new ES8 platform will debut in Q3, and the Leado L80 will also launch in Q2. “With the Leado L90 and the popular new ES8, these five large and mid-sized SUVs will lay a solid foundation for sales growth throughout the year,” Li said.

In Q4 2025, NIO delivered a total of 124,800 vehicles, up 71.7% year-over-year and 43.3% quarter-over-quarter, setting a new record. For the full year, total deliveries reached 326,000 units, a 46.9% increase year-over-year, also a new high.

“Currently, NIO’s product development pace aligns well with market trends, and we are very confident in achieving 40%-50% growth for the full year,” Li emphasized.

In terms of sales channels, NIO’s three brands will collaborate to expand into lower-tier markets.

Li stated during the earnings call that NIO, Leado, and Firefly will deepen their focus on key markets while jointly expanding into lower-tier cities through SKY stores operated by all three brands, creating a more efficient sales and service network.

CEO Stock Incentive Plan Launched

Alongside the financial results, NIO disclosed that on March 6, 2026, the company’s board approved a stock incentive plan and authorized the issuance of approximately 248 million restricted shares to founder, Chairman, and CEO William Li.

These restricted shares will be divided into ten equal tranches, with vesting conditions depending on the company achieving specific performance targets related to market value and net profit, as well as Li’s continued employment in key positions.

NIO stated that the restricted stock will vest in ten equal parts, contingent upon the company reaching certain market value and net profit goals. The plan took effect on March 6, 2026, and is valid for twelve years.

The company emphasized that these shares will only vest in stages after certain performance targets are met, which are directly linked to market value and net profit.

Specifically, when NIO’s US stock market capitalization exceeds $30 billion, $50 billion, $80 billion, $100 billion, and $120 billion, one-tenth of the shares will vest at each milestone.

Similarly, when net profit exceeds $1.5 billion, $2.5 billion, $4 billion, $5 billion, and $6 billion, one-tenth of the shares will vest at each level.

When the company’s market cap surpasses $120 billion and net profit exceeds $6 billion simultaneously, all incentive shares will fully vest.

Notably, during the earnings call, CFO Qu Yu mentioned that with five large SUVs on sale this year and the strong gross margin performance of large vehicles (with Q4 2025 ES8 gross margin exceeding 20%, approaching 25%), NIO aims to achieve non-GAAP profitability in 2026.

As of the close on the 10th, NIO’s stock rose 15.18%, closing at $5.69.