NIO (NIO) Q4 FY25 earnings call: guidance and Q&A

What is the product pipeline for H2 2026, and is NIO maintaining its 40-50% annual volume growth target given the challenging auto industry backdrop?

NIO plans to introduce the NIO ES9 (flagship SUV) in Q2, a large 5-seater SUV in Q3, and the ONVO L80 (large 5-seater SUV) in Q2, along with upgrades for existing models. Despite a challenging market, the company maintains its 40-50% year-over-year volume growth target for 2026, citing strong BEV penetration in premium segments and a product launch cadence aligned with market trends.

“[Interpreted] So for the full year, we do have confidence of achieving a year-over-year volume growth of 40% to 50%.”

asked by Tim Hsiao · answered by Bin Li

What key feedback has been received regarding user experience after the NWM rollout, and what are NIO's key technological highlights in Level 3/4 AD?

After the NWM rollout, Smart Driving usage increased over 80% in February. NIO focuses on Smart Driving time share and accident mitigation as key metrics. The World Model architecture with reinforcement learning is validated, with plans for increased computing investments and two major releases in Q2 and Q4 2026 to further enhance capabilities.

“[Interpreted] As you've mentioned, from January to February this year after the rollout of the version, the usage of the Smart Driving functionality actually increased by more than 80% month-over-month.”

asked by Tim Hsiao · answered by Bin Li

What is the Q1 margin guidance given rising costs and subsidies? Also, what is the trend for receivables from related parties, specifically battery swap partners?

Q1 vehicle gross margin is expected to be similar to Q4 2025, supported by the high-margin ES8 model, despite rising raw material costs. Receivables from the battery asset management company are increasing due to sales growth and BaaS take rate, but they have diversified financing channels, allowing for good control over payables and payment terms.

“[Interpreted] Overall speaking, for the vehicle gross margin in Q1, it will be maintained at a similar level as in Q4 last year.”

asked by Bin Wang · answered by Bin Li

Can NIO pass through raw material cost inflation to customers, given its high-end positioning and strong demand?

NIO faces cost pressures from raw material volatilities (memory chips, copper, lithium carbonate). While the full impact is unclear, the company will work with supply chain partners to mitigate effects. The launch of more large, higher-margin SUV models in 2026 is expected to help offset these costs and maintain vehicle gross margin within a reasonable range.

“[Interpreted] But for the full year, so far, we don't have a clear picture regarding the implication of all these volatilities and uncertainties.”

asked by Paul Gong · answered by Bin Li

After successful fundraising, what is Shenji's medium-term chip strategy? Will it explore external customers beyond internal sales?

Shenji will develop next-generation high-performance chips for NIO's products and explore mid-end chips for broader industry clients, including robotaxi and embodied AI applications. They are already exploring possibilities with external automotive companies. The second chip product, a competitive 5-nanometer automotive-grade chip, has achieved tape-out and is preparing for mass production.

“[Interpreted] But in the meantime, they are also planning and exploring mid-end chips that are more approachable by more clients in the industry, including potential partners and clients in robotaxi or embodied AI applications as we do see a good fit of our products in such areas and industries.”

asked by Y.C. Lai · answered by Bin Li

Given the rapid development of fast charging, elaborate on the advantages and necessity of battery swapping, especially for infrastructure and long-term plans.

Battery swapping and charging are complementary, with swapping offering unmatched speed and solving the mismatched life cycles of vehicles and batteries. Swapping also acts as a distributed energy storage system, aiding renewable energy integration and grid interaction. NIO plans to deploy around 1,000 new swap stations annually, emphasizing its long-term business success and defensible competitive advantage.

“[Interpreted] But in the foreseeable future, no matter how fast the charging becomes, it will never outperform the speed or the experience of power swapping.”

asked by Jing Chang · answered by Bin Li

Provide insights into volume and margin breakdown by brand (NIO, ONVO, FIREFLY) or product clusters (5 big SUVs vs. rest) to understand sustainable margin expansion.

Specific breakdowns are difficult due to market dynamics, but the 5 large SUV models will be major volume drivers, and FIREFLY's volume is rebounding. While all brands face cost pressure, NIO aims for 20-25% vehicle gross margin for NIO brand, above 15% for ONVO, and above 10% for FIREFLY in the long term. The CBU mechanism balances volume, margin, and overall business performance.

“[Interpreted] At the moment, we cannot give you a specific margin outlook or assumption for each brand, but put that against a longer time spectrum, we always target to achieve 20% to 25% vehicle gross margin for the NIO brand, above 15% vehicle gross margin for the ONVO brand and above 10% vehicle gross margin for the FIREFLY brand.”

asked by Yuqian Ding · answered by Bin Li