NIO's Delivery Surge: A Closer Look
NIO just dropped its Q3 2025 numbers, and the headline is undeniably juicy: vehicle deliveries jumped 40.8% year-over-year, hitting 87,071 units. That's a 20.8% climb from Q2. The market's eating it up; NIO stock price popped in pre-market trading (up 3.7%, according to some outlets). But before we start popping champagne, let's dig into what these numbers actually mean.
The delivery numbers are indeed impressive. Breaking it down, NIO brand vehicles accounted for 36,928 deliveries, ONVO added 37,656, and FIREFLY chipped in 12,487. NIO's CEO is understandably bullish, projecting Q4 deliveries between 120,000 and 125,000 vehicles. If they hit that, that's a 65.1% to 72.0% year-on-year increase – a new quarterly record, they claim. Ambitious? Absolutely. Achievable? That's the billion-dollar question.
Vehicle sales revenue mirrored the delivery surge, reaching RMB19.2 billion (that’s US$2.69 billion using their stated exchange rate). A 15% jump from Q3 2024 and a 19% increase from Q2 2025. No argument there: top-line growth is happening.
The Margin Mirage
Now, here's where things get a bit more nuanced. While revenue is up, the critical question is: are they making any real money on these sales? Vehicle margin – the profit they make on each car – did improve to 14.7%. That's up from 13.1% in Q3 2024 and a more significant jump from 10.3% in Q2 2025. Stanley Yu Qu, NIO’s CFO, is touting this as evidence of "enhanced profitability."
But let's not forget the bigger picture. While a 14.7% vehicle margin is better, it's still relatively thin, especially when you consider Tesla’s margins, which, while fluctuating, have often been significantly higher. And this is the part of the report that I find genuinely puzzling. Are these improvements sustainable, or are they the result of short-term cost-cutting measures that could impact quality or future innovation?
Investing.com points out that NIO "suffers from weak gross profit margins," noting a 10.28% margin for the last twelve months. That's a pretty stark contrast to the Q3 figure.
And here's a crucial parenthetical clarification: NIO is still bleeding cash. Loss from operations was RMB3.52 billion (US$494.7 million). That's better than the RMB5.23 billion loss in Q3 2024, but it's still a massive hole to fill. Net loss wasn't much better: RMB3.48 billion (US$488.9 million), down from RMB5.05 billion the previous year. The adjusted (non-GAAP) numbers paint a slightly rosier picture, but let's be real: adjusted numbers are always suspect.
The company is touting "continuous cost optimization" and "a greater contribution from higher-margin vehicle deliveries." Okay, but what specific costs are they cutting? And are those "higher-margin vehicle deliveries" actually high enough to offset the massive R&D and SG&A expenses? Details on these supposed cuts remain scarce, but the impact is clear.
Research and development expenses decreased by 28% year-over-year. Now, that could be a good thing – maybe they're becoming more efficient with their R&D spending. Or, and this is the more worrying possibility, maybe they're cutting back on innovation to chase short-term profitability. It’s a gamble, and the long-term consequences remain to be seen.
On the other hand, selling, general, and administrative expenses increased by 1.8%. They attribute this to "increased sales and marketing activities associated with new product launches." Translation: they're spending more money to sell more cars. Which, again, is fine, if those sales are profitable.
The company completed a US$1.16 billion equity offering in September. Which, in layman's terms, means they sold more shares to raise cash. That's a temporary fix, not a long-term solution. How long will that cash cushion last if they keep burning through billions every quarter?
NIO's balance sheet shows RMB36.7 billion (US$5.1 billion) in cash, cash equivalents, and various investments. That sounds like a lot, but it's worth remembering that they also have significant liabilities. Their financials state, "current liabilities exceeded current assets as of September 30, 2025." Not exactly a picture of financial stability, is it?
Delivery Growth Alone Can't Fix This
NIO is clearly making progress on the delivery front. But they need to prove they can turn those deliveries into actual, sustainable profits. Otherwise, they're just accelerating towards a financial cliff.
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The Red Ink Still Speaks Loudest
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