NIO's total market value returns to over HKD 100 billion. Li Bin: Non-automotive businesses have been profitable for three consecutive quarters. Memory shortages and other factors have caused the cost of high-end models to increase by over 6,000 yuan.

The market has responded positively to NIO’s first quarterly profit.

On March 11, Hong Kong stocks closed with NIO (NIO.US; 09866.HK) up over 14%, with a total market capitalization of HKD 106.2 billion; during the trading day, NIO’s stock price once rose over 16%. The previous day, in the US stock market, NIO also gained over 15%, closing at $5.70 per share.

On the evening of March 10, NIO released its financial report, stating that the company’s net profit for the fourth quarter was 283 million yuan, marking the company’s first single-quarter profit since its founding.

At a closed-door communication meeting on March 11, NIO founder, Chairman, and CEO William Li mentioned that the company’s other sales businesses (non-vehicle businesses) achieved three consecutive quarters of profitability and full-year profitability. This is a historic breakthrough for the company towards 2025, even “more noteworthy than the Q4 profit.”

“In other words, profits from after-sales services beyond battery swapping, finance, insurance, NIO Life (NIO’s peripheral brand), and some technical services not only cover the losses from battery swapping but also generate additional income,” Li said.

The financial report shows that NIO’s gross profit margin for Q4 2025 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. Among them, vehicle gross margin was 18.1%, up 5 percentage points year-over-year and 3.4 percentage points quarter-over-quarter; other sales gross margin was 11.9%, up 10.8 percentage points year-over-year and 4.1 percentage points quarter-over-quarter.

Memory Shortages and Raw Material Price Increases May Cause at Least 6,000 Yuan Cost Increase for High-End Smart Electric Vehicles

Li believes that from 2025 to 2030, the automotive industry will enter its final stage, with intense competition unavoidable.

Looking ahead, he sees three main trends: first, the total size of China’s passenger car market will not increase and may even slightly decline. Second, technology continues to rapidly iterate, with companies racing against each other—“no one can claim their technology is a year ahead of others.” Third, the marketing paradigm for new cars has changed; the “new car effect death valley” is a challenge all automakers must face. After initial sales, new cars will experience a cliff-like drop in sales. “Finding a perennial best-seller or a consistently hot-selling car is now very difficult.”

Regarding overseas markets, Li believes that pure electric vehicles face headwinds outside China. In this context, NIO will not blindly build factories overseas.

Additionally, it is worth noting that, due to the explosive growth of the AI industry, global memory capacity is shifting toward high-profit AI server fields. Coupled with the automotive industry’s accelerated transition to “smart mobile terminals,” memory has become a bottleneck restricting industry development.

Li straightforwardly states that NIO is also affected but can still absorb the price increases without passing them on to consumers. On one hand, the company has secured supply agreements with storage manufacturers in advance; on the other hand, leveraging its self-developed chips, NIO can anticipate risks and prepare alternative solutions early.

Looking across the industry, Li estimates that this year, memory shortages and raw material price hikes could increase the costs of high-end smart electric vehicles by 6,000 to 10,000 yuan.

“Fast Charging and Battery Swapping Will Accelerate the Transition of Other Powertrains to Pure Electric”

During the communication, Li also addressed the recent hot topic of the “fast charging versus battery swapping” debate.

“We are pleased to see more automakers participating in the construction of charging and swapping networks. Involving car companies in infrastructure development is very beneficial for increasing the penetration of pure electric vehicles and accelerating the transition from gasoline, range-extended, and plug-in hybrid vehicles to pure electric. Charging and swapping are not mutually exclusive; NIO’s cars can be charged, swapped, and upgraded—they are not limited to just swapping batteries,” Li said.

So far, NIO has deployed a total of 3,815 battery swapping stations worldwide, with over 28,000 supercharging and destination charging piles built. NIO aims to have more than 10,000 charging and swapping stations by 2030.

Li emphasized that “advances in charging technology, solid-state batteries, and NIO’s battery swapping mode are not in conflict; they address different issues.”

He believes that battery life, unlike vehicle lifespan, is a critical issue in practical use of new energy vehicles, requiring fundamental innovation to solve. Battery costs account for 30-40% of the vehicle’s total cost, and their lifespan is significantly shorter than the vehicle itself. Separating the battery from the vehicle addresses this problem.

If future battery technology extends battery life beyond the vehicle’s lifespan, it would also create a different form of mismatch, but battery swapping remains a relevant solution.

Will NIO Enter the Humanoid Robot Sector? Li Bin Looks Forward to “Latecomer Advantage”

After achieving quarterly profitability, “saving where possible and spending where necessary” remains one of NIO’s management principles.

More automakers are entering the currently hot humanoid robot sector. Li believes that once annual shipments reach hundreds of thousands or even millions of units, NIO can join at that time. Because the technology stack for robots and cars is the same, and supply chains, services, internal management, and capability models are similar—just like Huawei and Xiaomi entering the automotive sector—“latecomer advantage” can be a wise strategy.

Not entering the robot sector does not mean NIO cannot benefit from it.

Li mentioned that NIO’s chip subsidiary, Shenji, has successfully taped out its second advanced intelligent chip aimed at a broader customer base, and mass production is underway.

On February 26, Shenji announced the completion of its Series A funding agreement, raising over 2.2 billion yuan, with a post-investment valuation close to 10 billion yuan. The company’s initial orders mainly come from NIO, and it is actively expanding into emerging businesses such as embodied robots and agent reasoning, providing complete chip and smart hardware solutions for the era of Artificial General Intelligence (AGI).

Li hopes that Shenji’s high-performance reasoning chips will gain more partners in the automotive and embodied intelligence industries. During the previous earnings call, he revealed that many industry clients are already engaging with Shenji chips.