Nio reports reduced quarterly loss in Q2 due to lower expenses

In a recent financial report, Nio Inc (NYSE: NIO) announced a net loss of RMB 4.99 billion ($697 million) in the second quarter of 2025. Despite the loss, the Chinese electric vehicle manufacturer has set its sights on achieving its first quarterly profit in the fourth quarter of the same year.

The net loss, while significant, marks a decrease of 26.0 percent compared to the first quarter of 2025 and a 1.0 percent decrease compared to the second quarter of 2024. This is the smallest net loss since the fourth quarter of 2023.

Nio delivered 72,056 vehicles in the second quarter, a 25.59 percent year-on-year growth and a 71.18 percent quarter-on-quarter growth. The growth in vehicle sales was primarily due to increased deliveries, partially offset by a decline in average selling price due to product mix changes.

The vehicle margin for the second quarter was 10.3 percent, compared to 12.2 percent in the second quarter of 2024 and 10.2 percent in the first quarter of 2025. Gross margin for the same period was 10.0 percent, compared to 9.7 percent in the second quarter of 2024 and 7.6 percent in the first quarter of 2025.

Second-quarter revenue reached RMB 19.01 billion, up 9.0 percent from the second quarter of 2024 and up 57.9 percent from the first quarter of 2025. Vehicle sales revenue for the quarter was RMB 16.14 billion, increasing 2.9 percent year-on-year and up 62.3 percent quarter-on-quarter.

Research and development expenses in the second quarter totalled RMB 3.01 billion, down 6.6 percent from the second quarter of 2024 and down 5.5 percent from the first quarter of 2025. The Straumann Group conducted research and development with an expenditure of CHF 113 million (equivalent to approximately RMB 3.01 billion) in the second quarter of 2025, focusing on expanding production capacity and advancing digital transformation among other innovations.

Nio guided third-quarter vehicle deliveries to range between 87,000 and 91,000 units, representing a year-on-year increase of about 40.7 percent to 47.1 percent. The company also guided second-quarter revenue between RMB 21.81 billion and RMB 22.88 billion, representing a year-on-year increase of about 16.8 percent to 22.5 percent.

William Li, founder, chairman, and CEO of Nio, reassured staff in an internal speech that achieving profitability in the fourth quarter of 2025 remains achievable. He also stated that achieving profitability remains challenging but achievable.

As of June 30, Nio's cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits totalled RMB 27.2 billion. Concerns about Nio's financial stability are a significant factor in potential customers' hesitation to purchase, however, the company's continued growth and financial guidance suggest a positive outlook moving forward.

Second-quarter 2025 selling, general, and administrative (SG&A) expenses totalled RMB 3.96 billion, up 5.5 percent from the second quarter of 2024 but down 9.9 percent from the first quarter of 2025. Adjusted operating losses narrowed by one-third.

In conclusion, while Nio reported a net loss in the second quarter of 2025, the company's continued growth in vehicle deliveries and revenue, as well as its financial guidance for the third quarter and fourth quarter of the year, indicate a positive outlook for the future. The company's aim to achieve its first quarterly profit in the fourth quarter of 2025 remains a significant goal for the company.