NIO (NIO) Q1 FY26 earnings call: guidance and Q&A

What is the order flow for the ES9 during presale, its expected monthly volume, and potential impact on ES8 orders? Also, what is the Q2 and full-year gross margin guidance given rising costs?

Management expressed confidence in ES9's performance in the executive flagship SUV segment and noted that ES9's prelaunch positively impacted ES8 order intake, with ES8 orders increasing 30% week-over-week after ES9 test drives began. For gross margin, despite rising material costs (over RMB 10,000 per unit impact), the company targets 17-18% vehicle margin for Q2 and full-year through product mix, stable pricing, and supply chain optimization.

“[Interpreted] One week after the ES9 launch, actually, the order intake for the ES8 increased by 30%. And the starting -- since the test started from May 1, within 1 week of the quarter -- the week-over-week, ES8 order intake increased by 30%.”

asked by Bin Wang · answered by Bin Li

How does NIO plan to reboost growth for models like the 5, 6, 7 Series, which face greater competition? Can current OpEx parameters (SG&A <10%, R&D RMB 2-2.5B/quarter) support robust growth, and when is the next R&D up cycle expected?

Volume growth is currently driven by high-price, high-margin models (ES8, ES9, ONVO L90/L80). Starting next year, the entire product portfolio will be upgraded to new technology platforms. The company aims for leading market share in respective segments rather than absolute volume increases for all models. Non-GAAP R&D of RMB 2-2.5 billion per quarter is deemed sufficient for key technologies and new models, with efficiency improvements. SG&A is targeted at ~10% of revenue, with Q2 seeing a surge due to launches, but expected to normalize in H2.

“[Interpreted] For the full year 2026, our financial target is due to achieve positive non-GAAP operating profit. In terms of the OpEx guidance, for the R&D expenses, we target to maintain our non-GAAP R&D investments or expenses to be around RMB 2 billion to RMB 2.5 billion per quarter.”

asked by Tim Hsiao · answered by Stanley Qu

With increased competition and aggressive pricing in the large EV SUV segment, what is NIO's moat and how will it stay ahead? Also, given raw material cost inflation, is there an opportunity to cut incentives and improve pricing for the industry?

NIO's moat lies in its 11 years of systemic capabilities (full-stack tech, innovative supply chain, advanced manufacturing, power systems, holistic user experience) and its established premium brand positioning. The company emphasizes emotional connection and user value over aggressive pricing, especially as low prices may not translate to good margins with rising raw material costs. NIO's strategy is to stabilize prices while dialing back discounts, focusing on product and service competitiveness.

“[Interpreted] Our strategy is to maintain a reasonable volume increase while keep improving our margins and the EBIT performance as those are our key business targets. So overall speaking, different companies have different co-mechanism and strategies. And for us, we will be insisting on our philosophy and to mitigate the impact.”

asked by Paul Gong · answered by Bin Li

Provide an update on NIO's ADAS strategy, the deployment timeline for the in-house X1931 chip, its competitive advantage, and the impact of the RMB 2 billion fundraising for the chip subsidiary.

NIO's X1931 chip, the world's first automotive-grade 5nm process chip, has shipped over 250,000 pieces and is being deployed in ONVO products. By H2 FY26, over 80-85% of cars will have it. The AD solution uses a new road model + closed-loop reinforcement learning, achieving high performance with 20% of computing power compared to peers. ADAS will continue as a subscription service, becoming an important revenue driver. The RMB 2 billion fundraising for the chip subsidiary provides resources for developing more affordable future chip products.

“[Interpreted] And in the second half of this year, we believe that more than 80% or 85% of our cars will be equipped with our in-house developed smart driving chips.”

asked by Nick Lai · answered by Bin Li

What is the market feedback and order performance for the ONVO L80, and how will it sustain sales? What are the main drivers behind the significant improvement in other sales margin to over 20%?

The ONVO L80, a revolutionary 5-seater SUV, has received positive feedback and order intake meeting expectations, targeting a broader market than the L90. Its core competitiveness is technology and reimagined space. ONVO's main challenge is brand awareness, which is being addressed through celebrity collaborations and field promotions. Other sales margin improvement (to 20.6%) is driven by strong user stickiness and willingness to pay for premium services, improved operational efficiency (especially power services), and leveraging energy services for grid interactions. No one-off impacts were noted, and a 20% other sales margin is targeted for FY26.

“[Interpreted] And in Q1 this year, we have achieved over 20% other sales margin. And with this result, there was no one-off impact, and the key drivers of the improvement in other sales margins, mainly because, first of all, NIO, the entire company, has been committed to establishing this brand connections with our users and to deliver experience -- holistic experiences throughout the life cycle of the product that can go beyond their expectations.”

asked by Jing Chang · answered by Stanley Qu