Chinese EV maker Nio shares jump after signalling first quarterly profit

BEIJING – Nio shares jumped after the Chinese electric vehicle (EV) maker said it had likely posted its first quarterly profit, a watershed moment for a company that has spent years burning through billions of dollars to challenge Tesla and local rivals.

The Shanghai-based automaker issued a profit alert on Feb 5, stating that preliminary, unaudited figures for the fourth quarter of 2025 showed an adjusted operating profit of between 700 million yuan ($128.6 million) and 1.2 billion yuan.

That is a sharp turnaround from the 5.54 billion yuan adjusted loss posted a year earlier. Even under stricter generally accepted accounting principles, or GAAP, accounting measures, the company expects an operating profit of approximately 200 million yuan to 700 million yuan.

The surprise announcement sent Nio’s Hong Kong-listed shares surging as much as 6.7 per cent on Feb 6. That follows a 5.9 per cent jump in its US-listed stock on Feb 6.

For investors, the figures provide the first concrete evidence that Nio’s high-burn model, characterised by its expensive battery-swopping network and premium lifestyle extras such as the “Nio House” owners’ clubs, is finally bearing fruit. 

The company attributed the milestone to a “favourable product mix” and sustained growth in sales volume, as well as aggressive cost-optimisation efforts. Nio delivered a record 48,135 vehicles in December alone, covering its three main sub-brands, Nio, Onvo and Firefly.

Earlier this week, it also reported a 96 per cent year-over-year jump in January deliveries, despite the tepid market sentiment following tax and subsidy adjustments. 

The shift to profitability comes at a critical time. The Chinese EV market remains the most competitive in the world, with aggressive pricing and technological innovation from BYD and Xiaomi pressuring margins across the board.

Nio’s ability to pivot to profit suggests it has successfully carved out a “premium plus” niche that is less sensitive to the price wars currently hitting the mass-market segment.

Despite the positive alert, challenges remain. Investors will be looking for confirmation of the figures and, more importantly, guidance for 2026 when the company releases its final audited results in March. 

Nio’s share price has fallen over the past three months amid ongoing industry headwinds, “and any marginal sentiment improvement could lead to potential green shoots”, said Mr Tim Hsiao, an automotive analyst at Morgan Stanley. But “more meaningful share price recovery would likely await broader EV demand recovery in China”. BLOOMBERG