NIO Inc. (NYSE: NIO)
Q2 2025 Financial Analysis | September 2, 2025
Executive Summary
NIO Inc. delivered strong operational performance in Q2 2025, with vehicle deliveries reaching 72,056 units, representing a 25.6% increase year-over-year and 71.2% sequential growth. Total revenues increased 9.0% to RMB19.0 billion (US$2.65 billion), driven by the successful launch of the ONVO brand and continued NIO brand strength. Despite revenue growth, the company posted a net loss of RMB5.0 billion, an improvement from RMB5.05 billion in the prior year. With RMB27.2 billion in cash and equivalents, NIO maintains a strong liquidity position to fund its multi-brand expansion strategy.
Q2 2025 Highlights
Financial Performance
NIO’s Q2 2025 financial performance demonstrated the company’s operational resilience and strategic execution. Total revenues reached RMB19.0 billion (US$2.65 billion), representing a 9.0% year-over-year increase and a substantial 57.9% sequential improvement from Q1 2025. This growth was primarily driven by strong vehicle delivery performance across all three brands.
Vehicle sales increased 2.9% year-over-year to RMB16.1 billion, with the more moderate growth in revenue compared to delivery volume reflecting changes in product mix as the company launched lower-priced ONVO models. The sequential improvement of 62.3% from Q1 2025 demonstrates the seasonal strength and successful product launches during the quarter.
Gross margin improved to 10.0% from 9.7% in Q2 2024 and showed significant sequential improvement from 7.6% in Q1 2025. This improvement was driven by operational efficiencies, scale benefits, and positive mix effects from increased revenue from used cars and technical research and development services.
Vehicle margin decreased to 10.3% from 12.2% in the prior year, primarily due to product mix changes as ONVO vehicles carry lower margins than premium NIO models. However, the margin remained stable compared to Q1 2025 at 10.2%, indicating successful cost management efforts despite the challenging competitive environment.
Net loss improved slightly to RMB5.0 billion from RMB5.05 billion in Q2 2024, demonstrating the company’s focus on operational efficiency. On a non-GAAP basis, excluding share-based compensation and organizational optimization charges, adjusted net loss was RMB4.1 billion, representing a 9.0% improvement year-over-year.
Vehicle Deliveries & Brand Performance
| Brand | Q2 2025 Deliveries | Q1 2025 Deliveries | QoQ Change | Key Models |
|---|---|---|---|---|
| NIO | 47,132 | 31,041 | +51.9% | ET5, ET7, ES6, ES8, EC6, EC7 |
| ONVO | 17,081 | 7,373 | +131.7% | L60, L90 (launched July) |
| FIREFLY | 7,843 | 3,680 | +113.1% | Small smart high-end electric cars |
NIO’s multi-brand strategy showed strong execution in Q2 2025, with total vehicle deliveries reaching 72,056 units, a 25.6% year-over-year increase and remarkable 71.2% sequential growth from Q1 2025. This performance reflects the successful diversification of the company’s product portfolio and market reach.
NIO brand delivered 47,132 vehicles, representing 65.4% of total deliveries and showing strong demand for the company’s premium smart electric vehicles. The brand’s performance was supported by the continued success of the ET5 and ET7 sedan models, as well as strong SUV demand including the ES6 and upcoming All-New ES8.
ONVO brand achieved 17,081 deliveries, marking a strong 131.7% sequential increase. This family-oriented brand successfully addressed the mass market segment with competitive pricing and comprehensive features. The launch of the ONVO L90 large SUV in July 2025 provided additional momentum for the brand’s growth trajectory.
FIREFLY brand contributed 7,843 deliveries, more than doubling from the previous quarter. This small smart high-end electric car brand targets urban consumers seeking compact, intelligent vehicles, representing NIO’s expansion into a different market segment with distinct value propositions.
The July and August 2025 performance continued the strong momentum, with deliveries of 21,017 and 31,305 vehicles respectively. As of August 31, 2025, cumulative deliveries reached 838,036 vehicles, with 166,472 vehicles delivered in the first eight months of 2025.
Strategic Initiatives & Product Development
NIO’s strategic initiatives in Q2 2025 focused on multi-brand expansion, product launches, and strengthening its technological and operational foundation:
Product Launch Momentum
- ONVO L90 Launch: Officially launched July 31, 2025, the smart large-space flagship SUV targets family-oriented customers with extraordinary spaciousness, premium comfort, and all-scenario intelligence
- NIO All-New ES8: Unveiled August 21, 2025, with deliveries expected in late September, representing a comprehensive evolution in design, space, intelligence, and performance
- Premium Positioning: Both models demonstrate NIO’s commitment to leading technological innovation while addressing diverse customer needs across business, family, and personal segments
Organizational and Financial Strengthening
- Entered agreement to invest additional RMB20 billion in NIO China, increasing NIO’s controlling equity interest to 91.8%
- Comprehensive cost reduction and efficiency improvement initiatives showing results with over 30% sequential improvement in non-GAAP operating loss
- Organizational optimization charges of RMB442 million in Q2 2025 as part of structural improvements
Technology and Infrastructure Leadership
- Continued expansion of battery swapping and charging infrastructure providing long-term strategic advantage
- Advanced smart driving capabilities and intelligent cockpit features across all brands
- Integration of cutting-edge technologies to enhance user experience and operational efficiency
CEO William Bin Li emphasized the company’s market insights and product definition capabilities: “ONVO L90 and NIO All-New ES8 have received widespread user acclaim for their exceptional product experience, demonstrating our sharp market insights and precise product definition capabilities.”
Financial Position & Q3 2025 Outlook
NIO maintains a robust financial position to support its growth initiatives and multi-brand strategy:
Balance Sheet Strength
- Cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits totaled RMB27.2 billion (US$3.8 billion) as of June 30, 2025
- Strong liquidity position provides financial flexibility for continued investment in R&D, infrastructure expansion, and working capital needs
- Additional RMB20 billion investment commitment in NIO China demonstrates confidence in growth prospects
Q3 2025 Guidance
The company provided optimistic guidance for Q3 2025, reflecting strong order momentum:
- Vehicle Deliveries: Expected between 87,000 and 91,000 vehicles, representing year-over-year growth of 40.7% to 47.1%
- Total Revenues: Expected between RMB21.8 billion and RMB22.9 billion (US$3.0-3.2 billion), representing 16.8% to 22.5% growth year-over-year
- Guidance represents new company record for quarterly deliveries, driven by strong reception of ONVO L90 and anticipated NIO All-New ES8 deliveries
Operational Efficiency Focus
CFO Stanley Yu Qu highlighted the company’s approach to sustainable growth: “We are now approaching a structural inflection point in our financials, with positive momentum building toward a sustainable virtuous cycle and continued performance improvements.”
The company’s cost reduction initiatives are showing meaningful results, with non-GAAP operating loss improving over 30% sequentially, positioning NIO for improved profitability as volumes scale.
Risks & Opportunities
Opportunities
Risks
Conclusion
Strengths
- Strong delivery growth (25.6% YoY) demonstrating market traction
- Successful multi-brand strategy execution across market segments
- Robust financial position with RMB27.2 billion cash
- Improving operational efficiency and cost management
- Industry-leading battery swapping technology and infrastructure
Areas to Monitor
- Vehicle margin pressure from product mix changes
- Path to profitability amid ongoing losses
- Competitive dynamics in mass market EV segment
- Execution of ambitious Q3 delivery targets
- Integration challenges of three-brand strategy
Summary
NIO delivered strong Q2 2025 results that demonstrate successful execution of its multi-brand strategy and operational improvements. Vehicle deliveries reached 72,056 units (+25.6% YoY), with all three brands – NIO, ONVO, and FIREFLY – contributing to growth. Revenue increased 9.0% to RMB19.0 billion, while the company made meaningful progress on cost reduction initiatives.
The launch of ONVO L90 and upcoming NIO All-New ES8 positions the company well for continued growth, with Q3 2025 guidance calling for record deliveries of 87,000-91,000 vehicles. While vehicle margins faced pressure from product mix changes, the company’s focus on operational efficiency and scale benefits provides a path toward improved profitability.
With RMB27.2 billion in cash and a commitment to invest an additional RMB20 billion in NIO China, the company has the financial resources to execute its strategy and navigate the competitive EV landscape. The multi-brand approach allows NIO to address different market segments while leveraging shared technology and infrastructure investments.
Looking ahead, NIO’s success will depend on continued execution of its product roadmap, achieving scale efficiencies, and maintaining its technology leadership in an increasingly competitive market. The strong Q2 performance and optimistic Q3 guidance suggest the company is well-positioned for its next phase of growth.
