NIO extends adjusted operating-profit streak, but deliveries miss guidance

Stronger sales of premium models helped the Chinese EV maker improve profitability, while quarterly volumes and revenue remained below its own targets 

The five-seater NIO ES8 SUV

NIO Inc. reported a third consecutive quarter of positive non-GAAP adjusted operating profit, helped by stronger sales of higher-priced models, even as second-quarter revenue and vehicle deliveries came in below the electric-vehicle maker’s own guidance, according to its earnings report released Tuesday (September 1).

The results underline the progress NIO has made in shifting investor attention from pure volume growth toward profitability, a key metric for premium electric-vehicle makers operating in China’s highly competitive market.

Second-quarter revenue increased 69.1% YoY

The Shanghai-based automaker said second-quarter revenue rose 69.1% year on year to 32.14 billion yuan ($4.74 billion), supported by higher delivery volumes and a more profitable product mix. Revenue was up 25.9% from the first quarter, but still landed about 2% below the lower end of NIO’s prior guidance of 32.78 billion yuan.

Non-GAAP profit from operations reached 206.9 million yuan, roughly 3.1 times the 66.8 million yuan recorded in the first quarter and a sharp reversal from a non-GAAP operating loss of 4.04 billion yuan a year earlier. On a non-GAAP basis, net profit was 26.1 million yuan, down from 43.5 million yuan in the previous quarter, after excluding share-based compensation expenses.

While the non-GAAP operating-profit figure marks a continued improvement in the company’s cost profile, NIO’s GAAP results remain an important reference point for investors assessing whether the path to broader earnings consistency is sustainable.

Vehicle sales rose 80.1% year-on-year

Vehicle sales increased 80.1% year on year and 27.5% sequentially to 29.06 billion yuan. NIO attributed the gains to higher deliveries and improved average selling prices as its model mix shifted toward higher-value vehicles.

The company delivered 107,658 vehicles during the quarter, up 49.4% from a year earlier, but below its previous guidance range of 110,000 to 115,000 units. The shortfall tempers the earnings improvement and keeps investor focus on whether NIO can sustain momentum across its NIO, ONVO and Firefly brands.

The delivery miss also highlights the importance of execution across NIO’s expanding brand portfolio, where volume growth must be balanced against pricing discipline and margin protection.

Margins hold near four-year high

Overall gross margin stood at 18.4%, up from 10.0% a year earlier but slightly below the first quarter’s four-year high of 19.0%. Vehicle margin rose to 18.5% from 10.3% a year earlier and remained broadly stable compared with 18.8% in the first quarter.

Management pointed to stronger sales of higher-margin models and ongoing cost-structure optimization as key drivers of profitability. Research and development expenses fell 28.7% year on year to 2.14 billion yuan, while selling, general and administrative expenses rose to 4.42 billion yuan as the company increased marketing around new product launches.

The margin performance suggests that NIO is benefiting from a richer sales mix, but the rise in selling and administrative expenses also points to the cost of supporting fresh product launches and wider brand visibility.

As of June 30, NIO held 56.7 billion yuan in cash and cash equivalents, restricted cash, short-term investments and long-term time deposits, up from 48.2 billion yuan at the end of March. For the third quarter, it expects to deliver between 108,000 and 111,000 vehicles and generate revenue of 33.29 billion yuan to 34.05 billion yuan.

NIO delivered 35,934 vehicles in July and 35,836 in August, meaning it must deliver between 36,230 and 39,230 vehicles in September to meet its quarterly target. NIO Founder, chairman and chief executive William Li said all three brands posted growth in both sales volume and average transaction price, while chief financial officer Stanley Qu said higher-margin models and cost discipline helped protect profitability despite rising cost pressures.

That makes September a critical month for the company’s third-quarter performance. Meeting the delivery target would reinforce the view that NIO can convert product momentum into steadier financial results, while another miss would keep pressure on management to prove that margin gains can be sustained alongside growth.