Nio's Second Quarter 2025 Earnings Conference Call: Real-time Updates
Nio Reports Narrowed Net Loss in Q2 as Expenses Decline
Nio Inc (NYSE: NIO) has announced its second-quarter financial results, revealing a narrowed net loss and significant cost optimization. Over the past few months, the company has been working closely with its battery partners to increase capacity, and it has made substantial adjustments to its supply chain strategy over the past year or two.
The enhanced momentum of the Nio brand is expected to boost sales of several models, including the ET5, ET5 Touring, ES6, and EC6. Starting from the third quarter, Nio's sales growth will be driven by the implementation of its multi-brand strategy, with the strong sales of the L90 having already boosted the momentum of the Onvo brand. In August, order intake for the Onvo L60 reached a new high for this year.
Nio aims to deliver 150,000 vehicles in the fourth quarter, averaging 50,000 deliveries per month. The company aims to achieve a production capacity of 15,000 units for the L90 in October, and the all-new ES8 will reach a production capacity of 10,000 units in October, increasing to 15,000 units by December.
In 2026, Nio will launch the ES9 and the updated ES7 SUVs. The ES9, officially named by Nio's president for a launch in the first half of 2026, will be a key new model for the year. The third-generation ES8 is also set to debut shortly, marking another significant addition to Nio's lineup.
However, the company has no plans to upgrade the ET5, ET5 Touring, ES6, or EC6 in 2026. On the other hand, Nio's quarterly R&D costs could range between RMB 2 billion and RMB 2.5 billion in 2026.
Nio's fourth-quarter breakeven target is based on non-GAAP measures. The company aims for a vehicle margin of 16 to 17 percent on in the fourth quarter to achieve this target. Additionally, by the fourth quarter, the company aims to achieve a 20 percent gross margin on the L90 and ES8 models, with the Nio brand's gross margin target set at 20 percent, or even 25 percent.
Starting this year, Nio has been building a new marketing paradigm to support highly competitive products. The company aims to reduce its SG&A to sales ratio to below 10 percent in the fourth quarter. Nio has already opened 176 Nio Houses and 416 Nio Spaces, with Onvo's store count reaching 414.
In terms of battery capacity, Nio and its partners have been working to increase capacity over the past few months. The company aims to increase Onvo's production capacity to 25,000 units in the fourth quarter.
With these strategies in place, Nio is well-positioned to continue its growth and achieve its break-even target in the fourth quarter of this year. The company's focus on cost optimization, innovative product development, and expansion of its retail network bodes well for its future success.
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