NIO achieves quarterly profit for the first time! Approved granting Li Bin 248 million stock options as part of an equity incentive plan, setting a $100 billion market capitalization target

NIO achieves its 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 2025, 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. 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 2025, NIO achieved total revenue of 87.49 billion yuan, a 33.1% increase year-over-year, 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 year-over-year.

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 high not seen since 2022. The vehicle gross margin for the quarter was 18.1%, up 5 percentage points year-over-year and 3.4 percentage points quarter-over-quarter, the highest in three years.

NIO stated that its delivery guidance for Q1 2026 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 103.4% to 109.2% increase year-over-year.

“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 challenges, with slight declines compared to last year. However, he believes that growth in pure electric vehicles is very strong, driven by pure electric models last year. This year, pure electric vehicles will continue to grow rapidly.

He mentioned that the large three-row and five-seat SUV markets are entering a “golden era” for pure electric vehicles. Since September 2025, sales of pure electric large three-row SUVs have led all energy types 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 electric SUV will launch in Q2, a new five-seat SUV based on the all-new ES8 platform will launch in Q3, and the Leado L80 will also launch in Q2. “Along with the Leado L90 and the popular new ES8, these five large and extra-large SUVs will lay a solid foundation for sales growth this year,” Li said.

In Q4 2025, NIO delivered a total of 124,800 vehicles, a 71.7% increase year-over-year and a 43.3% increase quarter-over-quarter, setting a new record. For the full year, deliveries totaled 326,000 units, a 46.9% increase and 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 jointly expand into lower-tier markets.

Li said during the earnings call that NIO, Leado, and Firefly will deepen their focus on key markets while jointly expanding into lower-tier markets through SKY stores, providing more efficient sales and service networks across more prefecture-level cities.

Launching CEO Stock Incentive Plan

Alongside the financial release, 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 capitalization 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 on the company reaching certain market cap and net profit targets. The plan takes effect on March 6, 2026, and is valid for twelve years.

NIO emphasized that the shares will only vest in phases after certain performance goals are met, which are directly linked to the company’s market value and net profit.

Specifically, when NIO’s U.S. 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, NIO CFO Qu Yu said 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.