Reduced Quarter 2 Net Loss for Nio Due to Lower Operating Costs

In a report released today, Nio Inc (NYSE: NIO) shared its financial results for the second quarter of 2025. The electric vehicle manufacturer reported a net loss of RMB 4.99 billion ($697 million), marking a significant improvement from the previous quarters. This is the smallest net loss since the fourth quarter of 2023.

The company's 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. Despite the slight decrease, the margin improvement is a positive sign for the company's financial health.

Nio delivered 72,056 vehicles in the second quarter of 2025, within its guidance range of 72,000 to 75,000 units. This represents a year-on-year growth of 25.59 percent and a quarter-on-quarter growth of 71.18 percent.

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. However, the company's second-quarter revenue reached RMB 19.01 billion, a 9.0 percent increase from the second quarter of 2024 and a 57.9 percent increase from the first quarter of 2025.

William Li, Nio's founder, chairman, and CEO, reassured staff in an internal speech that achieving profitability in the fourth quarter remains achievable. He emphasized strategies like focusing on high-margin products and cost control to reach this goal.

Despite the progress, Nio still faces challenges. The company experienced an operating cash outflow in the second quarter, with current liabilities exceeding current assets, resulting in negative shareholders' equity as of June 30. Additionally, concerns about Nio's financial stability are a factor in at least 30-40 percent of potential customers' hesitation to purchase.

In terms of expenses, Nio's research and development expenses in the second quarter of 2025 totaled 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. Second-quarter 2025 selling, general, and administrative (SG&A) expenses totaled 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.

The adjusted operating losses narrowed by one-third in the second quarter of 2025, and the gross margin for the quarter 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.

Looking forward, 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.

As of June 30, Nio's cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits totaled RMB 27.2 billion. With a focus on profitability and continued growth, Nio aims to maintain its momentum in the electric vehicle market.