NIO has reached a critical point

Author | Chai Xuchen

Editor | Zhou Zhiyu

After several years of hard work, Nio and Li Bin have finally reached a turning point.

On August 12, good news arrived again. The Lido L90, which was launched only ten days ago, has accumulated over 4,000 deliveries, rising to the TOP 2 in the weekly sales ranking for large SUVs, surpassing the combined total of Li Auto's L9 and L8. Li Bin has finally tasted the sweetness of a blockbuster, and the capital market has voted with its feet. Since the pre-sale of the L90, Nio's stock price has continued to rise, increasing by over 40% just in July.

With soaring sales and skyrocketing stock prices, Nio's reputation in the public opinion arena has quickly reversed. More importantly, it has prompted the capital market to reassess the long-term strategic path that Nio has consistently adhered to.

Before this victory, there was a long period of strategic investment. With cumulative investments exceeding 80 billion, the company's financial statements have been under continuous pressure. The controversial battery swap heavy asset model has also sparked widespread discussions about its sustainability. For founder Li Bin, the pressure to prove this path is self-evident.

Now, the market trend is changing. As pure electric vehicles enter a new mature stage, consumer demand for energy replenishment efficiency and experience is becoming increasingly prominent. Against this backdrop, the battery swap network that Nio has proactively laid out is beginning to release its value, and the "moat" effect has already emerged. It can be said that the success of the L90 is a return on the market opportunity that Nio has waited for with years of strategic patience.

However, this is just the first step towards sustainable profitability. A blockbuster validates the correctness of the product and technology route, but how to efficiently convert this market momentum into robust financial performance is the ultimate test.

From strategic layout to the thrilling leap to operational success, Nio is currently halfway through.

Pure Electric Turning Point

Recently, Nio staged a grand talent acquisition drama. On August 7, Yang Bo, head of user operations at Nio, revealed on social media that in the past month, 800 sales personnel who previously worked for traditional luxury car brands have joined Nio's sales system.

In today's fiercely competitive industry, the flow of personnel often reflects changes in market dynamics. Nio has reversed its personnel optimization strategy from earlier this year and has turned to large-scale recruitment, which the market interprets as a direct reflection of strong confidence in its subsequent (especially L90) sales.

Currently, the L90 is stirring up a "pure electric storm" in the large three-row SUV market. Lido President Shen Fei stated, "More and more friends like Lido, and we are now in dire need of people."

Beneath the surface, the arrival of the industry turning point is quietly changing the fate of Nio.

In the past two years, plug-in hybrids and range-extended vehicles have been the mainstream in the new energy vehicle market, with many market players adding back "internal combustion engines" to please consumers. However, this year marks a significant turning point, as the market acceptance and sales growth of pure electric models have begun to fully reverse.

According to data from the China Passenger Car Association, from January to July, the year-on-year growth rate of retail sales of new energy vehicles shows that range-extended vehicles grew by 12.1%, far below the 35.2% for pure electric and 25.2% for plug-in hybrids. The differentiation in July was even more pronounced, with pure electric sales increasing by 24.5% year-on-year, plug-in hybrids slightly declining by 0.1%, while range-extended vehicles saw a year-on-year decline of 10.4% From this year's several heavyweight products, ultra-fast charging + large battery + long endurance has become the mainstream trend.

For example, the popular Aito M8 quickly launched its pure electric version after the extended range version was released; XPeng, which focuses on pure electric vehicles, has also risen significantly, with monthly sales approaching 40,000 units; IM Motors has introduced the 66-degree battery and 800V ultra-fast charging high-voltage platform in collaboration with CATL, offering over 450 kilometers of pure electric range; Leapmotor's currently popular SUVs primarily focus on pure electric with extended range as a supplement, with new models like B10 and B01 priced around 100,000 yuan, even directly omitting the extended range version.

The key behind this is the large-scale popularization of charging piles and battery swap stations, significantly alleviating range anxiety. Currently, there are nearly 14 million charging piles nationwide, with about 10 million private charging piles and 4 million public charging piles.

With a massive charging infrastructure in place, the competitiveness of extended range vehicles is gradually diminishing.

"We are now seeing a trend where extended range vehicles are making their batteries larger and larger. The goal is to further reduce the frequency of using the range extender. Originally, it could be used five or six times a year, but now it might only be used once or twice a year," Li Bin told Wall Street Insight.

In other words, the opportunity for pure electric vehicles to counterattack has finally arrived, and the L90 has sounded this horn.

Insiders at Nio revealed to Wall Street Insight that the current popularity of the L90 is beginning to radiate outward, not only boosting the heat of the L60 but also increasing the attention on the upcoming L80. Therefore, from the market's perspective, the release of the L90 brings positive benefits to Nio's performance and is long-term. This year is a significant product year for Nio, and the "reinforcement troops" waiting in the wings are providing the market with richer imaginative space.

Li Bin candidly told Wall Street Insight, "The reason we are still very confident in pursuing the pure electric route is that we know what kind of cars we will produce by 2025 and 2026, and what kind of user experience we will create by that time."

After enduring several years of hardship, Nio has finally reached a stage of accumulation and explosive growth.

Seeing the Light

In the increasingly intense competition in the automotive industry, Nio has always faced industry discussions.

In the past few years, Nio's financial performance has indeed been under pressure. As of the first quarter of 2025, Nio's cumulative losses exceeded 80 billion yuan, having recorded losses for five consecutive years, with a net loss of 22.402 billion yuan for the entire year of 2024, and a net loss of 6.75 billion yuan in the first quarter of 2025, expanding by 30.2% year-on-year, which is its core pressure point.

"Other kids have already gone to college, and we are still repeating the year!" Li Bin exclaimed at an internal meeting earlier this year.

The industry knows that Nio is willing to spend money. Li Xiang, the founder of Li Auto, once described that Li Bin's characteristic is to build a grand vision and validate it through corporate operations. In Li Bin's vision, he wants to create a lifestyle, hoping to establish a sustainable profit capability through this lifestyle centered around cars.

Therefore, with the most charging and battery swap stations, the earliest self-developed chips, the best-selling surrounding products, the richest community activities, the first to implement highway navigation assistance, and the first to release a mobile phone among new forces... Through this series of extensive layouts, Nio maintains its high-end positioning by providing users with emotional value But sufficient emotional value has never come from thin air; it requires a substantial amount of money behind it. Li Bin once said, "Let everyone compete first, and we will turn the table at the end." However, the emotional value created at a high cost not only failed to bring more sales as expected but also delayed the profitability progress repeatedly.

In this year's strong market temperature difference, the always "stubborn" Li Bin finally began to listen to advice.

"If the NIO crisis in 2019 was overcome with external help, this time, getting out of the low point of the past three years relies on our own abilities and management to generate our own blood; this is a consensus reached by the entire company," Li Bin told Wall Street Insight.

The optimistic Li Bin is not just "painting a pie" for the market again.

NIO has quietly climbed out of the trough. From January to July, NIO achieved a cumulative delivery of 135,000 vehicles, setting a historical high. In July, NIO welcomed its 800,000th vehicle off the production line, further consolidating its position in the high-end pure electric market; the Firefly brand opened up the sinking market with a high-quality small car priced at 120,000, and its cumulative deliveries in July also exceeded 10,000 units.

In the short term, the good start of the Lido brand, the breakthrough of the Firefly brand, and the stabilization of NIO are indeed encouraging. However, compared to this year's profitability target for the group, these changes are just the beginning. At this point, NIO has less than two quarters left to achieve its goal of turning a profit.

At the earnings conference, Li Bin provided a profitability roadmap: total monthly sales of the three major brands to exceed 50,000 units; gross profit margin to increase to 17%-18%; sales management expense ratio to be controlled at around 10%; R&D expense ratio to maintain at 6%-7%.

First, from the sales perspective, Li Bin revealed to Wall Street Insight that the internal expectation for the fourth quarter is that the Lido brand can reach 25,000 units, and the Firefly brand is at the level of 3,000-5,000 units. "There are still heavyweight models yet to be released, and the layout of channels and many aspects is gradually beginning to show. We have no reason not to succeed," Li Bin said.

The planning of the three major brands returning to the right track is not only about the models but also about new technologies under the brands, such as the "new three major components," chips, intelligent operating systems, intelligent chassis, world models, NOMI technology, and other black technologies, which will be rapidly delivered this year. Internally, there is hope that these can become the growth engine for sales.

The Reversal Begins

In the first half of this year, Li Bin set a military order for "profitability in the fourth quarter of 2025." Achieving this goal seems not easy; in the past, NIO spent over 60 billion on R&D bets, and the output in a market with strong explicit value demand has not been significant.

However, getting out of a "slow bull" often only requires one victory.

Looking back, before the release of the MONAM03, XPeng's market value was always at a low level. With its internal reforms and the popularity of the MONAM03, XPeng completely transformed. The new force dark horse Leapmotor is similar; since the C series entered an upward channel last year, Leapmotor's sales have skyrocketed, now exceeding 50,000 units per month.

Currently, NIO has three brands: NIO, Lido, and Firefly, covering high, medium, and low markets. After internal integration, the synergy of the three brands is gradually opening up sales growth space.

From January to July, NIO achieved a cumulative delivery of 135,000 vehicles, setting a historical high, with a year-on-year growth rate of 25.2%. Among them, the most impactful on the market is still the Lido brand, with the L90 becoming a key product for NIO to penetrate the family market under 300,000 Morgan Stanley pointed out that the monthly sales of the L90 breaking 10,000 can drive the gross profit margin of the Lado brand to 15%, forming a cycle of high-end profit protection and mid-range sales growth with Nio's main brand. Combined with new cars in the second half of the year, it is expected to contribute a 30% increase in sales.

In the second half of the year, in addition to the L90, the Lado L80, positioned as a mid-to-large 5-seat SUV, will also be launched. It is understood that the L80 fills the price gap between the L60 and L90, targeting family users with a strong demand for a five-seater. Moreover, it shares 70% of its components with the L90, and the "nested" strategy can accelerate cost reduction while quickly enriching the product line.

It should be noted that in Li Bin's plan for Nio in 2025, the sales target of 440,000 units will be shouldered by Lado. If each model of Lado can achieve monthly sales of 15,000 units, Nio's overall monthly sales are expected to exceed 50,000. At that time, Nio will return to the center of the new forces' table, replicating the positive cycle of XPeng and Leapmotor.

Expectations are already high, and Nio is once again facing a valuable opportunity for a surge. However, whether the market's high expectations can ultimately materialize will be the biggest test of Nio's execution capability.

"Our execution capability and operational efficiency have always been a concern for everyone. We indeed haven't delivered sufficiently good results in this regard in the past, and Nio needs to improve these two aspects this year," Li Bin pointed out to Wall Street Insights, noting that Nio has learned many lessons in a dynamic market and is now focused on listening to advice and correcting mistakes.

In the first half of the year, Li Bin carried out organizational reforms within the company. At the brand level, the R&D and sales departments of Lado and Firefly were merged into the main brand system, reducing the labor costs per store after the merger; in terms of product lines, Li Bin implemented a "basic operating unit" mechanism, strongly linking employee compensation to ROI, which directly achieved cost reduction and efficiency improvement.

From focusing on ROI to ensure "every penny invested must resonate," to closely following market trends and "listening to advice" for corrections, and now with the arrival of the pure electric era, the L90 has become a breakout hit. Nio's long-term story finally has a landing point, and the 40% increase in market value in July may just be the beginning. The question now is whether Li Bin and his Nio can seize the momentum and replicate the dozens of times surge in value seen after 2019.

It can be said that this year is a big year for Nio's products, and the long-promised "harvest season" is finally about to be realized. The dawn of a turning point has emerged, and Nio is also gearing up for a crucial leap in transformation