NIO Q3 2025 Earnings Call Summary Company Overview - **Company**: NIO Inc. - **Industry**: Smart Electric Vehicles (EVs) Key Highlights Deliveries and Growth - NIO achieved record deliveries in Q3 2025, delivering **87,071 smart EVs**, a **40.8% year-over-year increase** [2][4] - October 2025 saw a **92.6% year-over-year increase** with **40,397 units** delivered, marking three consecutive months of record deliveries [2][4] - Q4 2025 deliveries are projected to reach between **120,000 to 125,000 vehicles**, representing a **65.1% to 72% year-over-year increase** [2][5] Financial Performance - Total revenues in Q3 2025 reached **RMB 21.8 billion**, a **60.7% year-over-year increase** [3][19] - Vehicle gross margin rose to **14.7%**, with overall gross margin at **13.9%**, the highest in nearly three years [2][6] - Non-GAAP operating loss narrowed by over **30% quarter-over-quarter**, with both operating and free cash flow turning positive [2][6][24] Product Launches and Demand - NIO launched several new products, including the **Umbo L90** and the all-new **ES8**, both experiencing strong demand [2][7] - The **ES6 SUV** reached a milestone of **300,000 cumulative deliveries** in October [2][10] - The **Umbo L90** delivered over **33,000 units** in three months, leading the large battery electric SUV segment [2][8] Strategic Commitments - NIO is committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradable batteries [2][9] - The Omni brand has led the high-end small electric vehicle market in sales volume, expanding into global markets [2][11] - Advancements in smart driving technology include the introduction of the **new world model (NWM)**, featuring a closed-loop training system [2][12] Market Position and Future Outlook - NIO completed a **$1.16 billion equity financing**, strengthening its balance sheet for long-term R&D and user services [3][16] - The company anticipates a vehicle gross margin of around **18%** in Q4 2025, driven by strong demand for high-margin products like the ES8 [26][27] - NIO aims for full-year profitability on a non-GAAP basis in 2026, supported by increasing BEV penetration in the premium segment [35][40] Operational Efficiency - R&D expenses were **RMB 2.4 billion**, reflecting a decrease of **20-28% year-over-year** due to organizational optimization [22] - Selling, General, and Administrative (SG&A) expenses were **RMB 4.2 billion**, up **1.8% year-over-year** [22] Global Expansion Plans - NIO is expanding its global market presence, transitioning from a direct-to-customer model to a partnership-based approach [49] - The **Firefly** product will lead global market entry, with plans to introduce additional models in various regions [49][50] Market Trends - The overall penetration rate for new energy vehicles reached **55%** in Q3 2025, with BEV sales growing by **26% year-over-year** [37] - NIO's strategy includes leveraging new models and enhancing operational efficiencies to capture market share in the growing BEV segment [36][40] Conclusion NIO's strong performance in Q3 2025, marked by record deliveries and improved financial metrics, positions the company favorably for future growth. The commitment to innovation, strategic product launches, and global expansion efforts are expected to drive continued success in the competitive smart EV market.

Financial Data and Key Metrics Changes - In Q3 2025, total revenues reached RMB 21.8 billion, an increase of 16.7% year-over-year and 14.7% quarter-over-quarter [23] - Vehicle sales amounted to RMB 19.2 billion, up 15% year-over-year and 19% quarter-over-quarter, driven by higher deliveries [24] - Overall gross margin improved to 13.9%, compared to 10.7% in Q3 last year and 10% last quarter, reflecting higher vehicle margins and better profitability in parts and services [25] - Non-GAAP operating loss narrowed by 30% quarter-over-quarter, with positive operating cash flow and free cash flow generated in Q3 [8][27] Business Line Data and Key Metrics Changes - The company delivered 87,071 smart EVs in Q3 2025, representing a year-over-year growth of 40.8% [4] - The ONVO L90 delivered over 33,000 units in three months since its launch, leading the large battery electric SUV segment [11] - The All-New ES8 surpassed 10,000 deliveries within 41 days, becoming a top seller in the premium large three-row SUV segment [10] Market Data and Key Metrics Changes - In October, the company delivered 40,397 smart EVs, up 92.6% year-over-year, marking three consecutive months of record-high deliveries [6] - The penetration rate of battery electric vehicles (BEVs) in the premium segment increased from 12% last year to 18% in Q3 2025 [65] - The sales volume of BEVs in the large three-row SUV market ranked first for the first time in September and continued in October [67] Company Strategy and Development Direction - The company remains committed to a battery electric vehicle roadmap featuring chargeable, swappable, and upgradable batteries [9] - A multi-brand sales and service system is in place, with a focus on expanding the ONVO brand to cover a broader range of price segments [19][102] - The company plans to launch three new large models next year, aiming to achieve a monthly delivery rate of 50,000 units in the first half of next year [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving quarterly break-even in Q4 despite challenges from the phase-out of trade-in subsidies [30] - The company anticipates a vehicle gross margin of around 18% in Q4, with significant growth expected for the ES8 [34] - Management noted that the purchasing tax changes will have limited impact on the company due to the high percentage of users opting for battery subscriptions [49] Other Important Information - The company completed a total of $1.16 billion in equity financing in September, strengthening its balance sheet [17] - The global charging and swapping network now operates 3,641 power swap stations, providing over 92 million swaps [16] - The company has been supporting the NIO Cup Formula Student Electric China since 2015, cultivating young professionals for the industry [18] Q&A Session Summary Question: Break-even target and delivery guidance - Management remains confident in achieving quarterly break-even in Q4 despite a lower delivery guidance of 120,000-125,000 units due to market challenges [30][32] Question: Volume targets and new model schedule - Management expects to achieve a monthly delivery rate of 50,000 units in the first half of next year, with three large models launching [42] Question: 2026 outlook and purchasing tax impact - The company anticipates limited impact from the purchasing tax changes, as most users subscribe to battery services, maintaining a competitive edge [47][49] Question: R&D expense allocation and efficiency - R&D expenses are expected to remain around RMB 2 billion per quarter, with a focus on improving efficiency without compromising competitiveness [52] Question: Margin drivers in Q3 - The vehicle gross margin improvement in Q3 was driven by cost reductions and the sales of high-margin products like the L90 [81] Question: Chip joint venture with Accelra - The joint venture aims to leverage chip design capabilities and sell solutions to other clients, with opportunities in both automotive and non-automotive industries [84] Question: Overseas expansion strategy - The company is shifting to a partnership-based model for global market entry, starting with the Firefly brand [98] Question: Future product launches under ONVO brand - The ONVO brand will expand its product range to cater to the mass market, targeting price segments from RMB 100,000 to 300,000 [102]