NIO's total market value has returned to over 100 billion Hong Kong dollars. Li Bin: Non-automotive businesses have been profitable for three consecutive quarters, and factors like memory shortages have caused the cost of high-end models to increase by over 6,000 yuan.

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

On March 11, at the Hong Kong stock market close, NIO (NIO.US; 09866.HK) rose over 14%, with a total market value of HKD 106.2 billion; during the trading day, NIO’s stock price once surged over 16%. The previous day, in the US stock market close, 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 aiming for 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. The vehicle gross profit margin was 18.1%, up 5 percentage points year-over-year and 3.4 percentage points quarter-over-quarter; other sales gross profit 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 Hikes May Increase High-End Smart Electric Vehicle Costs by at Least 6,000 Yuan

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 evolve rapidly, 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 undergone a transformation. The “new car effect death valley” is a challenge all automakers must face. After the initial sales period, new cars 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, driven by 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 openly 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 proactively secured supply agreements with storage manufacturers; 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 and battery swapping debate.”

“We are pleased to see more automakers participating in the construction of charging and swapping networks. Automakers’ involvement in infrastructure development is very beneficial for increasing the penetration rate of pure electric vehicles and accelerating the shift 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, “Advances in charging technology, solid-state battery technology, and NIO’s battery swapping mode are not in conflict; they address different issues.”

He believes that since batteries have a different lifespan than the vehicle body, this is a challenge that new energy vehicles must face in practical use, 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 issue.

Furthermore, as battery technology advances and battery lifespan surpasses that of the vehicle body, it could lead to another form of mismatch in vehicle and battery lifespan. Battery swapping remains a relevant solution.

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

After achieving quarterly profitability, NIO continues to adhere to the management principle of “saving where possible and spending where necessary.”

More automakers are entering the booming humanoid robot sector. Li believes that once humanoid robots reach annual shipments of hundreds of thousands or even millions, NIO can join at that time. Since the technology stack for robots and cars is similar, and supply chains, services, internal management, and capability models are alike—similar to 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 broader customers, and mass production is underway.

On February 26, Shenji announced the completion of its first round of equity financing, 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 AGI.

Li hopes Shenji’s high-performance inference chips can 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.