“We believe the bottom has been reached in the first quarter. Starting from the second quarter, we’re entering a recovery phase,” said William Li, CEO of Nio, during a June 4 investor call.
His remarks came just a day after Nio posted a weak Q1 2025 earnings report. The company delivered 42,000 vehicles during the quarter, up just 4.1% year-on-year (YoY). This figure includes 27,000 units under the Nio brand and 14,700 under its new Onvo label. The average selling price across the portfolio was RMB 236,000 (USD 33,040) per vehicle.
By contrast, Li Auto and Xpeng Motors both delivered more than 90,000 vehicles in the same period. Their average selling prices were RMB 266,000 (USD 37,240) and RMB 153,000 (USD 21,420), respectively. While Xpeng still posted a quarterly loss of RMB 660 million (USD 92.4 million), it edged closer to breakeven. Li Auto, despite a sharp drop in profit, reported a net income of RMB 647 million (USD 90.6 million).
Xiaomi, which entered the electric vehicle market recently, sold over 75,000 cars in Q1 at an average price of RMB 238,000 (USD 33,320). It narrowed its quarterly loss to RMB 500 million (USD 70 million).
Nio’s finances were more concerning. It posted a net loss of RMB 6.7 billion (USD 938 million), and its cash reserves fell from RMB 41.9 billion (USD 5.9 billion) to RMB 26 billion (USD 3.6 billion) by the end of the quarter. However, the company raised more than HKD 4 billion (USD 509.7 million) in April through a share placement in Hong Kong.
Despite the numbers, Nio’s leadership maintained a confident outlook, projecting a rebound in Q2. The company expects to deliver between 72,000 and 75,000 units in the second quarter, a 25–37% increase from the year prior.
Li said Q2 2025 could mark a new single-quarter delivery record. Co-founder Qin Lihong was more optimistic, forecasting over 70% growth from the previous quarter.
That confidence stems from recent delivery performance. In April and May, Nio delivered 23,900–23,200 vehicles, respectively. To meet its Q2 target, it needs to ship between 24,900–27,900 vehicles in June.
Breaking down May’s figures: the Nio brand delivered 13,270 units, Onvo contributed 6,281, and Firefly added 3,680 in its first full month on the market. For the first time, all three brands made substantial contributions in a single month.
Nio’s ambitions stretch further. During the earnings call, Li floated a new target: delivering 50,000 vehicles per month by Q4, evenly split between the Nio and Onvo brands.
“50,000 [cars] a month isn’t a fantasy,” Li said.
Reaching that number is key to a larger goal: achieving profitability by Q4. Li simplified the math: “Profitability is simple: multiply sales by gross margin, and deduct expenses.” To improve margins, Nio is trimming nonessential R&D and cutting back on low-return initiatives. It plans to reduce quarterly R&D spending from over RMB 3 billion (USD 420 million) to RMB 2–2.5 billion (USD 280–350 million).
Still, questions remain over whether the 50,000-unit target is realistic.
On the Nio side, the company’s core “5566” lineup—comprising the ET5, ET5 Touring, ES6, and EC6—was fully available by May and is expected to ramp up deliveries in June. Li said the ES6 could achieve gross margins above 20%, with the EC6 even higher. The ET5 series is expected to improve margins by 10%, lifting the brand’s overall profitability.
A next-generation ES8, designed with global markets in mind, is due out in Q4. While Li noted it has more conservative dimensions than its predecessor, he suggested a bolder redesign is in the works for the third-generation model.
Onvo, the company’s mass market brand, is expected to supply the other half of Nio’s Q4 delivery volume. After a sluggish start, a leadership shake-up in April led to operational changes: “We cut 40% of Onvo’s staff and boosted sales by 40%,” Li said. The brand sold over 6,000 vehicles in May.
According to Li, Onvo will have three models on the market by year’s end: the L60, L80, and L90. He expects the L60 to stabilize at 10,000 monthly deliveries, with the L80 and L90 adding another 15,000 combined.
Qin said the company’s strategy includes opening more stores and using battery swap stations to boost test drives and outreach in underserved markets.
Still, even with momentum building, competition is intense. Xiaomi’s second model, the YU7, along with Li Auto’s i8 and i6 and Xpeng’s G7, are all slated to launch later this year. Xiaomi has reportedly begun stockpiling YU7 units in preparation for rapid delivery.
Nio’s competitors are also targeting profitability. Xpeng aims to break even in Q4, while Xiaomi could hit that milestone even earlier.
For Nio, the path is steeper. It’s aiming to erase a nearly RMB 7 billion (USD 980 million) deficit in just two quarters. “We’re in catch-up mode,” Li acknowledged. “Operationally, we need to close the gap.”
Reflecting on the company’s darkest hour in 2019, Li noted that survival back then depended on external bailouts. This time, he said: “We have to generate our own blood.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Anqi for 36Kr.