NIO Inc. just dropped its Q3 2025 numbers, and the headline is all about growth. Total revenues hit RMB21.79 billion (around $3.06 billion using their conversion rate), a 16.7% jump year-over-year. Vehicle deliveries are up 40.8%, reaching 87,071 units. CEO William Bin Li is talking about a "new cycle of accelerated growth." But does the data actually back up this rosy picture, or is it a carefully constructed narrative?
Let’s dig into the numbers, shall we? Deliveries are up significantly, no question. The breakdown is 36,928 NIO-branded vehicles, 37,656 from ONVO (their family-oriented brand), and 12,487 FIREFLYs (small, high-end EVs). Diversification is good, theoretically. But here's the rub: vehicle sales only increased 15.0% year-over-year, lagging behind the delivery growth. This suggests a lower average selling price—meaning they're moving more units, but making less per unit. Smart? Maybe. Sustainable? Questionable.
The company’s touting margin improvement, and it’s true. Vehicle margin climbed to 14.7%, compared to 13.1% a year ago. Gross margin also improved, reaching 13.9%. CFO Stanley Yu Qu credits "continuous cost optimization." Okay, but let's look closer at how they're optimizing costs. R&D expenses are down a whopping 28.0% year-over-year. That's a massive cut. Is that sustainable for a company supposedly at the forefront of EV innovation? I'm not convinced.
And this is the part of the report that I find genuinely puzzling. NIO is selling itself as a tech company, not just a car manufacturer. Slashing R&D while simultaneously launching new brands seems…counterintuitive. It’s like a pharmaceutical company bragging about record sales while simultaneously dismantling its research labs. What's the long-term plan here?
The Loss Reduction Mirage
The headline everyone's grabbing onto is that NIO is shrinking its losses. Net loss was RMB3.48 billion, a 31.2% decrease from last year. Adjusted net loss (excluding share-based compensation and organizational optimization charges) was RMB2.73 billion, a 38.0% improvement. Sounds great, right? But let's be real: they're still hemorrhaging money.
Here's a thought leap: how much of this loss reduction is real operational improvement, and how much is accounting trickery? They're conveniently excluding "organizational optimization charges," which sounds suspiciously like mass layoffs. Layoffs can boost short-term profitability, but they also gut institutional knowledge and morale. Is this a sign of a company streamlining for efficiency, or a company desperately cutting costs to stay afloat?
Even with these "improvements," NIO's balance sheet isn't exactly stellar. They’re sitting on RMB36.7 billion in cash and equivalents (around $5.1 billion), which sounds like a lot, until you remember how quickly EV companies burn through cash. Their own report admits they’ve been incurring losses since inception. They generated positive operating cash flow this quarter, but had negative cash flow in the first two quarters of 2025. They explicitly state there are "uncertainties as to the successful execution of our business plan." That's not exactly a ringing endorsement of their future prospects.
NIO's Q4 guidance is aggressive: deliveries between 120,000 and 125,000 vehicles, representing a 65.1% to 72.0% increase year-over-year. That's a huge jump. I’ll believe it when I see it. They need to pull off this ambitious target to justify the current nio stock price.
Is NIO Just Kicking the Can Down the Road?
The Q3 report paints a picture of a company making progress, but the devil's in the details. Margin improvements are good, but they seem to be coming at the expense of long-term innovation. Loss reduction is encouraging, but it's still a massive loss. Revenue is growing, but the average sales price is declining. And this is all happening in an increasingly competitive Chinese EV market.
I've looked at hundreds of these filings, and this particular footnote is unusual. The company admits its current liabilities exceeded current assets as of September 30, 2025. This is not a good sign. It suggests they're struggling to meet their short-term obligations.
The core question is: can NIO achieve sustainable profitability, or are they simply delaying the inevitable? The market seems to be buying the "accelerated growth" narrative for now, with NIO stock price jumping in premarket trading. But I suspect that enthusiasm will fade when investors realize that this growth is built on a foundation of cost-cutting and aggressive sales targets, not genuine innovation and sustainable business practices.
