NIO's First Quarterly Profit | Li Bin: From Calculating the Big Picture to Calculating the Details

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(Source: Securities Times)

Securities Times Financial Gallery / Provided by

Reporter Wang Xiaowei

On March 11, NIO founder, chairman, and CEO Li Bin participated in a group interview with media including Securities Times. The interview lasted over three hours, and Li Bin specifically postponed an internal meeting for this.

Laughter occasionally echoed during the interview. Just the day before, NIO became the first Chinese listed automaker to release its Q4 and full-year 2025 financial reports, achieving a quarterly operating profit of 1.25 billion yuan under Non-GAAP accounting standards for the first time. Li Bin, once called “the most miserable person of 2019,” has now led NIO out of its loss cycle.

What does this quarterly profit mean for NIO, which is listed in three regions? How is it achieving “self-sustaining growth” under a “heavy asset” model? How will NIO respond to the automotive market pressures in Q1 2026? What new strategies will emerge in the coming years? Li Bin answered these questions one by one during the interview.

Turning inward: “A Million-Fold Cost Mindset”

From the data, NIO’s profit in Q4 last year seemed natural: deliveries reached 124,800 units, up 71.7% year-over-year; revenue hit 34.65 billion yuan, a record high; gross margin on vehicles rose to 18.1%, the highest since 2022. However, Li Bin believes that the real transformation in financial figures is not just sales growth, but changes in product structure and cost logic.

The all-new ES8 became a “profit cow” in NIO’s Q4 financial report last year. Its per-vehicle gross margin approached 25%, with nearly 39,700 units delivered in the quarter. Its appeal in the 400,000+ yuan market allowed NIO to increase total gross profit without relying on price cuts.

Li Bin sees a “death valley effect” in new cars—long-term hot sales of a single model are a thing of the past. Instead, pulse marketing features dominate, with sales plummeting after launch becoming the norm. This raises the bar for continuous success in automakers. “NIO needs a sufficiently deep order pool to delay sales decline, while using systemic capabilities to ensure continuity.”

On the other side of profitability is cost control. NIO’s R&D expenses in Q4 last year were 2.026 billion yuan, down 44.3% year-over-year; sales and administrative expenses were 3.54 billion yuan, down 27.5%. The “basic operating unit” mechanism implemented over the past year and improved R&D efficiency have shown results in the last quarter’s financials.

Li Bin shared a detail during the meeting: for a certain R&D project, industry standard investment is 30 million yuan; the team initially requested 20 million yuan, but after his personal intervention, the goal was achieved with only 2 million yuan. He requires each operating unit to think with a “cost mindset a million times over”—any savings multiplied by the expected scale of one million vehicles can influence decisions. “Now, this mindset has shifted from a slogan to muscle memory.”

Denying the “Heavy Asset Model”: Battery Assets as “Mobile Mines”

Li Bin believes that besides net profit, two points in the financial report indicate a qualitative change in NIO’s profitability.

First is breakthroughs in non-vehicle businesses. By 2025, NIO’s “services and community-related business” revenue exceeded 10 billion yuan for the first time, accounting for 12% of total revenue, and this segment has become profitable for the full year.

Li Bin sees this as a closed-loop commercial model based on vehicle ownership—after surpassing one million vehicles sold cumulatively, derivative businesses like after-sales, NIO Life, and financial services begin to generate scale effects. This means NIO is no longer just a car seller but is starting to extract ongoing value from the entire user lifecycle.

Second is the business potential of battery assets and the vehicle-battery separation model. Previously, NIO-controlled, Hubei KeTuo, and CATL invested in NioEnergy, which completed the world’s first green REITs issuance for power batteries. Financial institutions, with their expertise in risk assessment, deeply collaborated with and recognized NioEnergy, confirming the reasonableness and sustainability of the vehicle-battery separation model.

Li Bin mentioned that under this model, batteries are long-term owned assets, motivating companies to develop long-lasting batteries. The battery swap mode aligns user, company, and social interests. Additionally, batteries contain valuable metals like nickel and cobalt; if metal prices rise later, batteries can appreciate in value, increasing recycling returns. Thus, battery assets are essentially “moving mines” for the company.

Similarly, the chip business is gaining attention. Despite previous losses, market voices questioned NIO’s in-house chip development as “overestimating capabilities.” However, in early 2026, chip subsidiary Shenji completed its first round of over 2.2 billion yuan in financing, with a post-investment valuation approaching 10 billion yuan. Once criticized as “heavy assets,” these are now becoming “hard assets.”

In response to a Securities Times reporter’s question, Li Bin explicitly denied the label of “heavy asset model” for NIO. “Although the market thinks NIO’s battery swap investments are large, we are relatively lightweight.” He explained that most of their office buildings are leased, and for new businesses like robotics, NIO remains cautious. “NIO accounts for only 1.5% of China’s auto sales, so there’s still significant room for growth. We prefer to focus on doing well with our core business.”

Sustainability Test: Increasing Competition

Compared to quarterly profits, sustainability is the real test.

This year, the external environment has become more complex. Rising costs of storage chips, fluctuations in copper and aluminum prices, and increased per-vehicle costs of 6,000 to 10,000 yuan are putting pressure on margins. Li Bin also admitted that even memory chips are sometimes “unavailable despite having money to buy.”

Meanwhile, the rollout of BYD’s fast-charging technology has prompted a reassessment of the battery swap route. Li Bin responded: “Fast charging and swapping are not contradictory. NIO offers both; swapping addresses the systemic issue of different battery lifespans.”

NIO plans to launch the ES9, Leado L80, and a large five-seat SUV based on the ES8 platform in 2026, continuing to bet on the high-margin large vehicle market. But this segment is becoming crowded—Li Auto and Wenjie are targeting similar price ranges, and more players are entering the pure electric large vehicle space. The road ahead for NIO is still far from smooth.

“After emerging from the loss tunnel, the road is not smooth—price wars could reignite at any time, AI competitions are burning money, and supply chain fluctuations never stop. But at least it shows we can complete the first mile on a muddy road. The next question is whether we can turn ‘survival ability’ into a ‘longer, more stable system’,” Li Bin said.

Alongside the financial report, a long-term equity incentive plan for Li Bin was announced: 248 million restricted shares will vest in ten tranches, linked to the company’s market value and net profit—market cap must sequentially reach $30 billion to $120 billion, and cumulative net profit must reach $1.5 billion to $6 billion.

“NIO’s first quarterly profit is more about reassuring customers than just telling the capital markets,” Li Bin emphasized. Compared to market valuation, he values the market more: “Previously, when users recommended others buy NIO cars, one concern was that NIO might lose money. Our core market is China, and we cannot let users worry about that.”

The Q4 profit last year was a financial victory. The longer-term test has just begun.