NIO

Image source: The Motley Fool. Tuesday, Sept. 1, 2026 at 8:00 a.m. ET AVP and Head of IR, Corporate Finance and Strategic Investment - Rui Chen Founder, Chairman of the Board and Chief Executive Officer - William Li Chief Financial Officer - Stanley Qu Operator: Hello, ladies and gentlemen. Thank you for standing by for NIO Inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Mr. Rui Chen, AVP and Head of IR, Corporate Finance and Strategic Investment of the company. Please go ahead, Rui. Rui Chen: Good morning, and good evening, everyone. Welcome to NIO's Second Quarter 2026 Earnings Conference Call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. William Li, Founder, Chairman of the Board and Chief Executive Officer; and Ms. Stanley Qu, Chief Financial Officer. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from views expressed today. Further information regarding risks and uncertainties is included in certain filings of the company with the U.S. Securities and Exchange Commission, the Stock Exchange of Hong Kong Limited and the Singapore Exchange Securities Trading Limited. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that NIO's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. With that, I will now turn the call over to our CEO, Mr. William Li. William, please go ahead. Bin Li: [Interpreted] Hello, everyone, and thank you for joining NIO Inc.'s 2026 Q2 Earnings Call. In Q2, the company delivered a total of 107,658 smart EVs, achieving year-over-year growth of 49.4%. In Q2, the NIO, ONVO and FIREFLY brands all achieved year-over-year and quarter-over-quarter growth in both sales volume and average transaction price. More specifically, the NIO brand delivered 60,945 vehicles, leading China's passenger vehicle market with transaction prices above RMB 350,000 across all powertrain types. The ONVO brand delivered 29,124 vehicles, demonstrating strong growth momentum. And the FIREFLY brand delivered 17,589 vehicles, maintaining its leadership in the high-end compact car market. In July and August, the company delivered 35,534 (sic) [ 35,934 ] and 35,836 vehicles, respectively. In Q3, the total deliveries are expected to range between 108,000 and 111,000 units. On the financial side, in Q2, the company's gross margin stood at 18.4%, driven by continued strong performance from the higher-margin products and ongoing cost optimization despite pressure from sharply rising raw material and chip costs. The vehicle gross margin remained solid at 18.5%. The gross margin of other sales was 17%, with services and community-related businesses continuing to contribute to profitability. In Q2, the company continued to generate non-GAAP operating profit as well as positive operating cash flow and free cash flow, further increasing its cash reserves to RMB 56.7 billion. This helped strengthen the company's business fundamentals while laying solid groundwork for its long-term sustainable development. Now turning to our products, R&D and operations. For the NIO brand, on July 9, the flagship SUV [ ES9 ] launched and began deliveries of the 5-seat version, catering to more diverse user needs and scenarios with its 5-seat layout and spacious interior. The ES8 has maintained strong momentum since launch and achieved the 140,000 units delivery milestone in just 335 days, leading China's passenger vehicle segment in the RMB 400,000 price range and the large SUV segment. In the Net Promoter Score survey by Land Roads, the NIO ES8 achieved the highest NPS among BEVs, ranking first in both sales volume and product reputation. In the meantime, the flagship executive SUV ES9, which began deliveries in late May, has started winning over users from traditional luxury fuel-powered SUVs, leading in sales volume among passenger vehicles with transactional prices above RMB 500,000 in June and July. The continued strong performance of NIO brand flagship models has further strengthened its leading position in the premium BEV market. For the ONVO brand, the L90 surpassed 60,000 deliveries within its first year since launch, ranking #1 among the large battery electric SUVs priced around RMB 300,000. The L80 continued to see steady deliveries, winning broad recognitions with its exceptional cargo space and scenario-based functionality. In Q2, leveraging the outstanding product strength of the L90 and L80, the ONVO brand became the sales leader among large SUVs priced below RMB 300,000. In addition, the upgraded L60 better meets the needs of its target users, further strengthening ONVO's sales momentum. The FIREFLY brand has been #1 in market share among high-end compact cars for 15 consecutive months, maintaining its leadership in the segment. Its precise product positioning and unique brand identity continue to win the hearts of target users. In terms of smart driving, on June 18, the latest version of NIO WorldModel was rolled out to over 700,000 NIO and ONVO users. As the second major release this year, the new version further leveraged the world model architecture and closed-loop reinforcement learning, delivering significant enhancements in functionality and user experience. User adoption has continued to grow. Since the upgrade, NIO users' mileage with urban NOP has increased by 92.8%. The upgrade also covered all ONVO users whose mileage with urban NOA increased by 127.8% following the upgrade. Powered by leading model algorithms, systematic architecture and strong engineering capabilities, NIO is the industry's first car company to develop and roll out smart driving systems in parallel across general purpose and proprietary chip platforms with a common software branch and synchronized releases. Users across different technology platforms and brands can enjoy a continuously evolving industry-leading smart driving experience throughout the vehicle life cycle. On the sales and service front, so far, the company has 165 NIO Houses, 376 NIO Spaces, 441 ONVO stores as well as 420 service centers and 93 delivery centers. In J.D. Power's 2026 Customer Service Index study for NEVs, the NIO brand ranked #1 among both premium brands and Chinese brands, maintaining its top position since the rankings were first introduced. Our high-quality services have earned widespread recognition from both the industry and users. In terms of the power network, at present, the company has 4,123 power swap stations and 30,294 power chargers and destination chargers worldwide. On August 7, NIO's 4000th power swap station went live, marking the launch of its first fifth-generation station. The fifth generation can support battery swaps for all models of NIO, ONVO and FIREFLY, covering a wide range of vehicle sizes from compact cars to full-size SUVs. With significantly enhanced operational and service efficiency, the fifth generation station is able to provide enhanced external services and support open operations. Leveraging standardized power operations at scale, the company is also exploring value-added businesses such as electricity trading, further unlocking the commercial value of battery swapping. On July 23, NIO was named by TIME Magazine as one of the world's most sustainable companies of 2026, becoming the only Chinese automaker on the list. We will continue to advance our BEV road map, shaping a more sustainable and brighter future with our users. As China's automotive market enters a new phase of competition, the landscape is undergoing several important changes. First, with the rapid growth of BEV penetration, BEVs have become a mainstream powertrain in the market. Second, the industry is moving from a period of brand ambiguity towards greater brand clarity with brand becoming an increasingly important factor in consumers' purchasing decisions. Third, the final round of competition is shifting from product-level competition to competition in comprehensive system capabilities. For years, we have remained committed to the premium BEV strategy and have been building our system capabilities. This puts us well aligned with the industry's evolution and positions us for a new phase of high-quality growth. We are confident in achieving our operating targets. Thank you for your support. With that, I will now turn the call over to Stanley for Q2 financial details. Over to you, Stanley. Stanley Qu: Thank you, William. Let's now review our key financial results for the second quarter of 2026. Our total revenues reached RMB 32.1 billion, up 69.1% year-over-year, at 25.9% quarter-over-quarter. Vehicle sales were RMB 29.1 billion, up 80.1% year-over-year and 27.5% quarter-over-quarter. The year-over-year growth was mainly due to the increased deliveries and a higher average selling price driven by a more favorable product mix. The quarter-over-quarter increase was driven by higher deliveries. Other sales were RMB 3.1 billion, up 7.2% year-over-year and 12% quarter-over-quarter. The year-over-year growth was driven by increased sales of parts, accessories and aftersales vehicle services, partially offset by decreased sales of used cars and technical research and development services. The quarter-over-quarter increase was due to increase in revenues from used car sales and parts, accessories and aftersales vehicle services sales. Looking at margins, vehicle margin was 18.5% compared with 10.3% in Q2 last year and 18.8% last quarter. The year-over-year improvement was driven by a more favorable product mix, while quarter-over-quarter vehicle margin remained stable. Overall gross margin was 18.4% versus 10% in Q2 last year and 19% last quarter. The year-over-year increase was mainly due to the increased vehicle margin and the quarter-over-quarter slight decrease was mainly due to gross margins from vehicle sales, provision of power solutions and sales of parts, accessories and aftersales vehicle services. Turning to OpEx. R&D expenses were RMB 2.1 billion, decreased 28.7% year-over-year and increased 13.8% quarter-over-quarter. The year-over-year decrease was mainly driven by lower personnel costs in R&D functions due to organizational optimization, reduced design and development costs from different development stages and improved operational efficiency. The quarter-over-quarter increase was mainly due to the incremental design and development costs for new products and technologies as well as the increased personnel costs in research and development functions. SG&A expenses were RMB 4.4 billion, increased 11.6% year-over-year and 22.5% quarter-over-quarter. The year-over-year increase was mainly driven by increase in sales and marketing activities associated with new product launches, while the quarter-over-quarter increase also reflected increased sales and marketing activities associated with new product launches as well as higher personnel and related costs for marketing functions and share-based compensation for general corporate functions. Loss from operations was RMB 0.3 billion, down 92.9% year-over-year and up 12.4% quarter-over-quarter. Excluding share-based compensation expenses, adjusted profit from operations was RMB 0.2 billion. Net loss was RMB 0.5 billion, showing a decrease of 89.4% year-over-year and an increase of 59% quarter-over-quarter. Excluding share-based compensation expenses, adjusted net profit was RMB 26.1 million. Furthermore, our positive operating cash flow grew substantially, and we achieved positive free cash flow. Our cash position strengthened further with RMB 56.7 billion in total cash and cash equivalents, restricted cash, short-term investments and long-term time deposits. That wraps up our prepared remarks. For more information and the details of our unaudited second quarter financial results, please refer to our earnings press release. Now I will turn the call over to the operator to start our Q&A session. Operator? Operator: [Operator Instructions] Your first question comes from Bin Wang with Deutsche Bank. Bin Wang: My question is about the order flow sustainability about your ES8 and ES9 SUV. We noticed that in the premium SUV market, some of your peers' competitor although [indiscernible] on a few -- several months. So can you explain why is that and how NIO differentiates in facing the competition in the high-end premium SUV market? Bin Li: [Interpreted] Thank you for the question. Regarding NIO's flagship models, including the ES8 and ES9, they will continue to see strong demand. For the ES8 in August, we delivered around 10,099 units. And in 11 months, we have delivered more than 140,000 ES8s. And in September, it's going to witness its next milestone of 150,000 deliveries, which means that in less than one year since its launch, it has already surpassed 150,000 unit delivery. So the demand for the models are pretty strong. And as previously, we've talked about how the products are quickly iterated and introduced in the Chinese automotive market, where for a new model in the market, it's normally difficult. We're having difficulty to lost its popularity and attention by the market. But for the ES8, it may be the first model that is breaking away from this market trend. And regarding our flagship executive SUV ES9, it also sees strong demand since its launch, especially for the Horizon Edition and the Signature Edition. Right now, for users placing an order, they will need to wait for 3 months or nearly 4 months to pick up a new car. And if we look at the sales number of the ES9 in August and July, I think July, we were still consuming some preorders. But if we are making a comparison between the incremental orders in July and August, we actually have seen a growth from July to August. So we are also confident in the continuous popularity and also demand for the ES9. And also one thing worth noting is that around 3/4 of the ES9 users are actually from nonexisting NIO users, from users outside of the NIO user community. This also shows that ES9 has successfully reached out to a broader user base. And there are several reasons for the popularity and the demand for the ES9. The first is the technology innovation. On the ES9, we have introduced or debuted several dozens of industry first or industry-leading technologies and tech innovation is still so far a very important competitiveness and also differentiation of our products. And secondly, the product definition has precisely catered to the needs of the users in the premium segment, especially users buying the car for their business needs and also for their family occasions, where our cars have catered to both their emotional as well as functional needs. And our users also speak highly of the product experience. And the third is the holistic and one-of-a-kind experience enabled by our charging and swapping network as well as our aftersales services, which are actually a systematic capability difficult to replicate by the competitors. According to the Land Roads recent study on the aftermarket satisfaction on the new energy vehicles, we've been topping the list for 3 times consecutively. And also in J.D. Power's recent research in terms of the post-market satisfaction on the new energy vehicles, we are also ranking the first for several years in a row. So for the premium segment, such experience centering on the services and post-market services are also very important. And the fourth one is, as also previously talked about, the entire automotive market is now shifting from a period of brand ambiguity to a period of brand clarity, where users' purchasing decisions was previously largely based on the specifications of a product, and now their decision is mostly driven by the brand. And in that case, NIO has also established a pretty solid foothold and a clear brand awareness in the premium battery electric vehicle market. Among many users, they naturally believe that if they are going to choose a car to replace their existing Mercedes, BMW and Audi and NIO will be their natural choice. And if they are looking for a premium BEV model, then NIO is also their go-to car. Among our existing NIO users, we've also studied their purchasing decision, where we find that the brand reputation and awareness is already accounted for more than 30% of their purchasing decision. This has further proven our solid foothold in the premium BEV market. And if we further look at the numbers by the insurance associations, in Q2, the average selling price of the NIO brand was RMB 406,000, far higher than the prices of Mercedes, BMW and Audi and ranking the first among all the mainstream premium brands. And in July, the average selling price of the NIO brand was over RMB 430,000. And we believe that the scarcity of such premiumness of our brands as well as the competitiveness of our brands across all 3 brands will also become a long-term foundation for our competitiveness going into the future. Operator: Your next question comes from Tim Hsiao with Morgan Stanley. Tim Hsiao: This is Tim from Morgan Stanley. Congrats on the third consecutive profitable quarter. I have 2 questions. The first one is about ONVO because compared to the robust growth of the NIO and the FIREFLY brands, we noticed ONVO's customer conversion and order momentum have been relatively moderate to ramp since launch. So I just want to know that how is the progress in recent adjustment to customer incentive and selling strategies. And looking forward, what further changes would management plan to effectively improve ONVO's order momentum? Yes, that's my first question. Bin Li: [Interpreted] Thank you for the question. It's true that ONVO is actually in a more competitive market than NIO and FIREFLY, where the level of competition, the intensity level of competition in terms of the number of brands and also the number of models are also much more intense than that of NIO and FIREFLY. But if we look at the ONVO's overarching performance since its launch, especially from its specific segment and market, it has actually done some good progress and achievements. In terms of the -- if we look at the average selling price of the ONVO products, as we all know that the passenger vehicle market in the first half of this year was a bit challenging. And even amid these challenges, ONVO still achieved an average selling price of RMB 240,000, achieving also significant growth year-over-year. And in the first half of this year in the China's automotive market, only 8 brands managed to achieve increase both in their sales volume as well as the average selling price, where ONVO is one of these 8 brands. So in terms of the average selling price, ONVO is even outperforming some traditional luxury brands. So if we perceive ONVO as a premium family-oriented brand, it is actually achieving a pretty good baseline from this brand definition perspective. And in terms of the overall product competitiveness, we also see some good progress and also foundation, especially a good conversion rate from sales leads and opportunities all the way to orders, which means that when users get to know about the brand and products, it's also more possible and likely for them to place an order on the ONVO product. So right now, for the ONVO brand, the challenge is more about its overall brand awareness, where its current brand awareness is maybe comparable with NIO's awareness around 5 to 6 years ago. So right now, our focus is also to enlarge the brand awareness and also the popularity through also different collaborations, offline activities and also engagement with more targeted communities. And the second actions we are taking is to keep rolling out our Sky stores where we can host NIO, ONVO and FIREFLY brands under the same roof. With that, we are able to further expand our sales network and also to really introduce our ONVO brand to more users in the lower-tier cities. And the third action is to also introducing new ONVO products so that we can also reach out to broader family user base. But in the meantime, we will still maintain ONVO's positioning as a premium high-quality family-oriented brand. So we will not be very aggressive in entering into the entry-level segment. We will still strike a balance between the sales volume and also the vehicle gross margin. Right now, in the Chinese automotive market, we actually see a vacancy where there is no such brand that is comparable with the upscale product lines of Toyota or Volkswagen that can serve the needs of the family users. This is where we see the opportunity for ONVO to develop its awareness in that specific segment. Tim Hsiao: My second question is a quick one. Just want to know that if management can share next year's new model refresh and the key launch milestones for the NIO, ONVO and FIREFLY, 3 brands on the group. Yes, that's it. Bin Li: [Interpreted] Thank you for the question. For the NIO brand, for next year, we will be introducing new products coming from the 5 and 6 series product lines. I believe that the market is also aware of some of our latest plans. Where for the ONVO brand next year, we are going to introduce a major strategic new product that will also help to enrich our existing product lineup. And for the FIREFLY brand, we will keep this single model strategy, but keep rolling out special editions and also technology upgrade. So for FIREFLY, it's a bit like taking the iPhone approach where it will stay in this same product, but with new additions. Operator: Your next question comes from Paul Gong with UBS. Paul Gong: My first question is regarding your vehicle gross margin outlook for the next 2 quarters amid the ongoing cost inflation. We are aware that the memory costs continue to go up. And I just want to listen to your thoughts, how does that impact the vehicle gross margin. Stanley Qu: [Interpreted] Thank you for the question. It's true that since this year, the cost structure of the automotive industry has been under pressure. And for the company, we've been facing pressure coming from the rising material costs, including memory chips, batteries and also other bulk materials. And if we look at the cost in Q2 as well as the cost in late Q4 last year, the average cost impact or cost increase is around RMB 14,000 per car. And also in Q2, we've taken a series of efforts to stabilize our vehicle margin and under the rising cost pressure. And as previously mentioned, we've been actually using -- taking a very stable pricing strategies for our products. We didn't really lower the price -- lower the price in exchange for the sales volume. And secondly, on the supply side, we've been working with the supply chain to take a series of optimization measures, the efforts as well as commercial negotiations. With all these efforts combined, we managed to stabilize our vehicle margin at 18.5% in Q2. And going into the second quarter, we expect the material cost to continue to increase by another RMB 2,000 to RMB 3,000, but we will also take a series of countermeasures to mitigate this risk. In Q3 and Q4, we hope to still stabilize our vehicle gross margin at the same level as in Q2. Paul Gong: So my second question is, yes, despite of all this cost pressure, you have done significant improvement in terms of profitability over the past one year. My question is, what gives you management confidence that these improvements are sustainable rather than say cyclical? Bin Li: [Interpreted] Thank you for the question. To do that we need to take a comprehensive measure towards that. The first is that, as also mentioned by William, the automotive competition in China is now shifting to more brand-driven. And for the NIO brand, our ES9 and ES8 are still seeing pretty stable demand and also with significant market share in their respective segment. These 2 models, they are also making major contribution in our product mix as well as vehicle margin as both of them has over 20% vehicle margin. And this will be our foundation for the overall performance. And the second is to keep rolling out optimizations towards our cost structure by making more accurate product definition and also by working on the cost reduction opportunities together with our supply chain partners. These are the efforts that we've been working on in the past several quarters. And internally, we've been doing all this decoupling and analysis of our R&D and also supply chain capabilities, putting them into the alternate granularity, identifying also opportunities for continuous cost reduction, and we will also keep up this good work. And as mentioned, the Chinese automotive industry has been under cost pressure. But even amid all these challenges, the company has still managed to achieve high-quality growth as shared by Stanley, some of the efforts we've been taking to secure the long-term and sustainable growth of our business. And I'd like to also share some numbers. In the first half of this year, our sales volume increased by 67% year-over-year, where our total revenue increased by 86% year-over-year. That is faster than our volume increase. And in terms of our gross profit, it increased by 282% year-over-year, much faster than the growth of our revenue. And this is amid all the challenges coming from the supply side, the rising raw material costs on the chips and on everything. And as mentioned, also in Q2, the impact on the vehicle is around RMB 14,000 on average, where compared from late last year, where in the second half of this year, such impact will continue to enlarge by another RMB 2,000 to RMB 3,000, which means that in the second half of this year, compared with Q4 last year, our cost structure will be burdened by another RMB 16,000 to RMB 17,000. But even against this backdrop, we still aim to achieve a steady growth in our gross profit. This is also a demonstration of our system capabilities and also competitiveness in terms of our technology, products, supply chain, sales and also brand management. Paul Gong: Congratulations for the achievement. Operator: Your next question comes from Nick Lai with JPMorgan. Y.C. Lai: My first question is financial related. With very strong operating cash flow and free cash flow generation by first half, can management remind us our cash burn, including CapEx and R&D? And what the level of free cash flow can we anticipate by year-end? And with very strong cash position right now, can you remind us where do we plan to invest or spend our cash in terms of CapEx and R&D? That's my first question. Stanley Qu: [Interpreted] Thank you for the questions. I will answer to your question through several major aspects. The first is regarding CapEx. For this year, we expect our full year CapEx to be relatively flat from last year, roughly RMB 6 billion to RMB 7 billion per year. And such investment is mainly used for basically product research and development as well as the rollout of our sales and service network. Not much investment going into the capacity and also factory side. And the second is that we will continue to roll out and expand our charging and also swapping network. For this year, we still plan to build 1,000 new power swap stations. But different from previous years where in 2024, we've introduced the Power Up Partner plan, where through the plan, we would like to collaborate with different partners for the construction of our charging and swapping infrastructure. And this year, we've made major progress in this plan, where we've been partnered with over 40 state-owned enterprises, platforms and also financial institutions across 25 provinces and cities in China in constructing our charging and swapping infrastructure. And for this year, we expect all the newly built infrastructure will be sponsored or funded by our Power Up partners. And the third is that our Battery-as-a-Service business model is also earning more recognition from also -- more users. This is also helping our battery asset management and the battery asset management company getting stronger support from the financial institutions and also different partners. In the first half of this year for the battery asset management company, we know as we also see some good progress regarding the fundraising across different channels. And in terms of the amount due from the battery asset management company, it is also reduced from over RMB 16 billion earlier this year to less than RMB 15 billion in end of Q2. Considering that we are also enlarging the user base and also the business size of the battery asset management. The increase in the absolute term is also relatively proportionally. So this is also a good sign. With increase in sales volume as well as ongoing efforts in improving our operating performance, we expect that in Q3 and Q4, we can maintain the positive free cash flow as well as operating cash flow. With that, we also believe that in the second half of this year, our cash position will continue to enhance. Y.C. Lai: My second question is ADAS related. The market is indeed very, very competitive. Every peer offer Autopilot function or features. So I'm wondering from a user standpoint, how do we differentiate ourselves from peers across our product offering from high end to entry level. And at the same time, given high adoption or penetration right now, will we consider different payment options such as pay-as-you-go or subscription option in the future? Bin Li: [Interpreted] Thank you for the question. This year, people actually start to see the benefits and also the advantage of our overall architecture featuring the NIO WorldModel plus the reinforcement -- closed-loop reinforcement learning and also collective intelligence, especially considering that the actual investment -- computing investment and the computing power we use for the cloud training for the autonomous driving and smart driving functionality is relatively small, achieving such good experience with our latest release, this has also proven the advantages of our technology road map. And also, as mentioned earlier today, on June 18, we actually have pushed our latest NIO WorldModel version to over 700,000 users across different brands and also technology platform. Simultaneously, this has also proven the advances of our technology and architecture. And also, I would like to share some numbers with you. For the Cedar user, that's our third-generation platform equipped with NX9031 smart driving chip, where among these group of users, around 58% of them have been engaging smart driving functionalities for more than half of their trips. And regarding the business model for the smart driving service, well, right now, for the new NIO users and ONVO users, we offer them a 5-year complimentary subscription to our smart driving capabilities and systems. But for the used car users or when they expire on this 5-year complimentary service, they will have to definitely pay for the subscription. For the used car users, they are paying RMB 380 per month for the smart driving subscription, where we now see a penetration rate of around 20% among this used car users. This is also a pretty sizable amount, showing also the competitiveness of our product and experiences. And of course, right now, this is just a small user base. But for the longer term, we believe that this will also be a quite sizable source of revenues for our business. Right now, every year, the revenue from that part of the business is around several thousands of millions of RMB. Operator: Your next question comes from Ming-Hsun Lee with BofA. Ming-Hsun Lee: Will, this is Ming. So I also have 2 questions. So first question is related to your fifth-generation battery swap station. With more expansion of your new swap station, and this can accommodate all of your 3 brands. Could you give us more details regarding the CapEx per station and also maintenance cost compared to your previous generation swap station? Besides that, right now, you also open to some other auto OEMs for your battery service. Could you elaborate your pricing strategy and also your unit economy model? Yes. That's my first question. Bin Li: [Interpreted] Thank you for the question. Regarding the fifth-generation power swap station, we have adopted a flexible design where the station can accommodate all models from NIO, ONVO and FIREFLY. So basically it can be compatible with cars of different dimensions and sizes. And in terms of the cost, we've also achieved continuous improvements on top of the Gen 4, where the -- in terms of the material costs, we've achieved also optimization and reduction in cost. And for per station cost, if we're excluding batteries in the station as well as all the costs related to the high-voltage power supply and energy preparation, if you only look at the station itself, it's around RMB 1.4 million per station. That is around RMB 100,000 cheaper than the fourth generation. And in terms of the operations of the swap stations, we've been also making continuous improvements in terms of the actual people efficiency supporting the operations of all stations. We've also made improvements in terms of the first time through of the power swaps as well as the software features between current performance as well as the performance earlier last year, it's already improved by 50%. Of course, for the fifth generation, as they are new to the field, so we are still ramping up its first time through. But comparing with the previous generations around the same time frame, we already see quite significant improvement in terms of the success rate of our power swaps among the fifth-generation station. Overall speaking, we also believe that the efficiency of fifth generation will be much better than the previous ones. And the third is regarding the partnership and also alliance with other OEMs regarding power swap. Several years ago, we've signed up with several OEMs regarding this power swap alliance, and we still have this ongoing communications and also collaborations on some projects. And in the meantime, as robotaxis is becoming a very popular area where we see power swap station and power swap service in general can be a good infrastructure support for the robotaxi business. So we are also exploring opportunities with our partners from that perspective. In terms of the cooperation framework and also how we charge them on such services, we basically will charge them for the admission fee for the use of our -- for the use and access to our power swap network. But more details are still being discussed and are to be closed when we have the actual project in the implementation. And also for the entire new energy vehicle industry, it has been entering into this new stage where more and more people start to realize the benefits of a power swap and more OEMs are also embracing the idea of swappable vehicles. Where for the NIO power, the advantage is with more partners joining this effort, it can help us to optimize and amortize our operating costs. And by standardizing the battery packs, we can also improve the efficiency as well as optimize the cost structure. Ming-Hsun Lee: My second question is related to your operating expense. Especially, we noticed that your sales and marketing expense in the second quarter is higher. Is it because you launched more new models during the quarter? Could you give more guidance for your 2026 operating expense? Stanley Qu: [Interpreted] Thank you for the question. I will still share the information according to 2 types of overall expenses. The first is regarding the R&D expenses. As mentioned, we will basically be staying flat with our R&D expenses. Non-GAAP around RMB 2.5 billion, and we will also make adjustments -- dynamic adjustments according to the actual cadence and the pace of our projects and the business. But for this year, it will be roughly RMB 2.5 billion per quarter in terms of the R&D investment. And in terms of the R&D expenses, maybe some will compare our current expenses with our previous level or with our competitors, where definitely our expenses is relatively low. But we also need to really pay attention to the utilization of such expenses and also the efficiency of our R&D activities. First of all, NIO has been staying committed to the battery electric vehicle road map. With that, we can be more focused on the technologies and the products related to the BEV road map without spreading our efforts across BEV, PHEV or EREV. And secondly is that as we've been rolling out this CBU mechanism internally, with the CBU mechanism, we can also better measure and improve the efficiency of our R&D systems as well as our R&D organizations. So even with a relatively moderate investment into the R&D activities, we can still maintain our leadership and advancements in the technologies and also products. And regarding the SG&A expenses, if we look at the SG&A as a percentage to the sales revenue in the first and the second quarter under the non-GAAP standard, it's around 13% in the first half. And also in the second half, as we see a slight increase in terms of the sales expenses, it's mainly driven by some one-off expenses as we have -- most of our new products for this year were launched in second quarter, including our ES9 and also some facelift models for ONVO. So that one-off impact is roughly RMB 500 million, majorly happened in Q2, where in the second half, we don't expect to have such one-off impact in terms of the sales expenses. So in terms of the second half outlook, in terms of the SG&A expenses as a percentage to the sales revenue, under the non-GAAP standard, we expect it to be around 10% to 11%. This is also a controllable as well as an achievable target for us. Operator: Your next question comes from Jing Chang with CICC. Jing Chang: Time is limited. I have only one question. We know that our Senior Vice President, Mr. Ren Shaoqing, has founded an embodied AI start-up company in which we have made a strategic investment. So what are the long-term cooperation potentials between this new company and NIO? And also what long-term value can it bring to our company? Bin Li: [Interpreted] Thank you for the question. Yes, Mr. Ren Shaoqing, the Head of our Smart Driving Department is, now also starting up a new business regarding physical AI and also embodied intelligence and NIO is supporting his business as a strategic shareholder. But in the meantime, he will still be the head of our Smart Driving department responsible for the overarching technology as well as the long-term tech road map for our products. And we also think that such arrangement is necessary and also meaningful. As right now, NIO is staying focused on our core business. But in the meantime, through this start-up by Mr. Ren, we can also keep tracking of the latest developments in the physical AI and also embodied intelligence without diluting our focus, affecting our P&L. But in the meantime, such start-up can also help to make full use of our resources as well as attracting external strategic shareholders and investors. So we think this is a good arrangement. And also, as we all know that the competition for the AI talent within the arena of physical AI is also quite intense. So through such start-up, we can also better capture the top-notch talent in the industry. And that will also be beneficial to the long-term development of both the start-up as well as for our AI-related business. And for the long term, we believe that we will have a lot of strategic collaborations and projects between NIO and also this AI start-up. Operator: Your next question comes from Yuqian Ding with HSBC. Yuqian Ding: So my question is what your volume outlook for this year and maybe sell into fourth quarter... Rui Chen: I think your voice is breaking. Yuqian, can you repeat your question? Yuqian Ding: Yes, sure. So... Rui Chen: We still can't hear you. Yuqian Ding: Yes. Can you hear me now? Rui Chen: Yes, much better. Yuqian Ding: Okay. So I'll just repeat my question is about the volume outlook in fourth quarter and '27, given maybe strong seasonality and the backdrop of new model cycle next year? Bin Li: [Interpreted] We expect that the passenger vehicle market to be able to recover in Q4 this year. With that, our target for Q4 is achieving an average volume of over 40,000 units per month. And for the mid and long term, with our product lineup as well as our sales and service network coverage, we expect our annual volume growth to be around 40% to 50%, and we will maintain that for the mid and long term. Operator: As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Rui Chen: Thank you again for joining us today. If you have further questions, please feel free to contact our IR team through the contact information on the website. This concludes the conference call. You may now disconnect your lines. Thank you. 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See the 10 stocks » *Stock Advisor returns as of September 8, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NIO (NIO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

NIO (NYSE:NIO) has just posted its second quarter 2026 results, giving investors fresh numbers on revenue, sales and losses, alongside updated guidance for deliveries and total revenue in the coming months. NIO’s latest figures arrive after a tough stretch for the stock, with the 1-year total shareholder return down 37.03% and the 5-year total shareholder return down 89.96%. The year to date share price return has fallen 24.90% and shorter term momentum has also weakened, including a 30-day share price return of 18.91% and a 90-day share price return of 27.99%, despite recent updates on deliveries, earnings and new retail formats such as the Macau NIO House and multi brand Sky Stores. Compare NIO’s latest earnings and delivery trends with other electric vehicle stocks by scanning our hand picked 21 high quality undiscovered gems that may be flying under most investors’ radar. Given NIO’s stronger recent revenue and loss figures, but a share price that has retreated hard over 1 and 5 years, the tension is clear. Does the current valuation fairly reflect that business progress, or does it overshoot it? Based on the most followed narrative, NIO’s fair value of $7.31 sits well above the last close at $3.86, which creates a sizable valuation gap for investors to assess. Read the complete narrative. Read the complete narrative. Want to see what sits behind that confidence in NIO’s future cash flows? The narrative leans heavily on rising margins, faster earnings growth and a rich future earnings multiple. Curious which assumptions need to hold for that gap between price and fair value to close. Result: Fair Value of $7.31 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, NIO’s story can still be knocked off course if fierce EV competition forces heavier discounting, or if regulatory pressure intensifies after the Pentagon listing. Find out about the key risks to this NIO narrative. With all this mixed sentiment around NIO, it helps to move fast and test the story against the numbers yourself. To see what optimism is already reflected in the data, review the 3 key rewards If you stop with NIO, you risk missing other compelling setups. Use the screener to compare different angles, sharpen your process and spot fresh opportunities. Target potential bargain opportunities by scanning 52 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect their current business performance. Prioritise staying power by checking list of solid balance sheet and fundamentals (53 results) for companies with financial profiles that may better handle pressure when conditions get tougher. Strengthen your income ideas by reviewing 11 dividend fortresses that focus on higher yields backed by underlying cash generation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NIO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Chinese EV maker NIO's NIO second-quarter 2026 results show that the company is making progress on growth and profitability, although some of the risks that have weighed on the stock are still there. Its three-brand strategy is gaining traction, vehicle margins are improving and management expects positive operating and free cash flow in the second half. At the same time, rising costs, high debt and intense competition remain concerns. NIO's growth story is no longer limited to its namesake brand. The core NIO brand delivered 60,945 vehicles in the second quarter, while its flagship ES8 reached 140,000 cumulative deliveries in just 335 days. The ES8 also led China's RMB400,000-plus SUV segment. The ES9 similarly ranked first among vehicles priced above RMB500,000 for two consecutive months. The bigger positive is that NIO, ONVO and Firefly all increased both deliveries and average transaction prices year over year and sequentially. That suggests the multi-brand strategy is gaining traction rather than hurting the parent company's position. ONVO's L90 has already crossed 60,000 deliveries in its first year and leads the sub-RMB300,000 large-SUV segment. Firefly has also remained the top-selling model in the high-end compact-car segment for 15 straight months. NIO expects to deliver 108,000-111,000 vehicles in the third quarter, representing 24-27.5% year-over-year growth. Management also expects monthly deliveries to exceed 40,000 by the fourth quarter and is targeting 40-50% annual volume growth over the longer term. These are ambitious targets, but the recent delivery trends provide some support. NIO also made meaningful progress on margins. Vehicle margin nearly doubled from 10.3% a year ago to 18.5% in the second quarter, helped by a better product mix and lower costs. The challenge now is maintaining that level. Higher battery, semiconductor and other raw-material costs have already increased vehicle costs by about RMB14,000 per unit since late 2025. Management expects another RMB2,000-3,000 increase in the second half of 2026. Despite this pressure, it plans to keep vehicle margins around 18.5% in the second half. More importantly, NIO expects positive operating and free cash flow in both the third and fourth quarters. If the company delivers on that target, it could reduce some of the concerns around its cash burn and balance sheet. NIO's technology and battery-swap network also give the company some differentiation in an increasingly crowded EV market. Its new world-model-based ADAS system reportedly requires only about 20% of the cloud computing resources needed by competitors for similar performance. If that advantage holds up in real-world use, it could help reduce costs and eventually support subscription revenues from advanced driving features. NIO's battery-swap network is another advantage. The company now has 4,123 swap stations and 30,294 chargers globally. Its fifth-generation swap station can serve NIO, ONVO and Firefly vehicles. NIO plans to add another 1,000 swap stations in 2026, with Power Up partners helping fund the expansion. That could allow the network to grow without putting as much pressure on NIO's own cash resources. The improvements do not remove the risks. Rising input costs could put pressure on margins if NIO cannot offset them through supplier negotiations, cost reductions and product engineering. ONVO still needs to build stronger brand awareness. Its products may be gaining traction, but the brand does not yet have the recognition that NIO has built over the years. That could make customer acquisition more difficult as competition increases. The balance sheet is another concern. NIO's long-term debt-to-capitalization ratio stands at about 82%, well above the industry average of roughly 30%. That leaves the company with less financial flexibility, particularly if cash flow improvement takes longer than expected. Operating expenses are also rising, with SG&A up 11.6% year over year. Meanwhile, NIO continues to compete with industry leaders like Tesla, BYD, as well as its closest peers XPeng XPEV and Li Auto LI. The company therefore has little room for execution mistakes. Year to date, shares of NIO have declined 24%, wider than the industry’s loss but narrower than its closest peers Li Auto and XPeng. Shares of Li Auto and XPeng fell 29% and 45%, respectively, over the same timeframe. Image Source: Zacks Investment Research From a valuation perspective, NIO currently trades at a forward price-to-sales ratio of 0.44, slightly above its peer group. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NIO’s 2026 and 2027 bottom line implies a year-over-year improvement of 90% and 195%, respectively. See how the estimates have been revised over the past 60 days. Image Source: Zacks Investment Research NIO's latest results provide enough evidence to stay invested, but not enough to justify an aggressive bullish stance. Deliveries are growing across all three brands, vehicle margins have improved sharply and the company is targeting positive free cash flow in the second half. However, rising costs, high leverage, higher expenses and intense competition remain meaningful risks. For now, NIO looks more like a “Hold” than a “Buy.” Investors who already own the stock can give the company more time to prove that its improving margins and cash flow are sustainable. NIO carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIO Inc. (NIO) : Free Stock Analysis Report Li Auto Inc. Sponsored ADR (LI) : Free Stock Analysis Report XPeng Inc. Sponsored ADR (XPEV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NIO Inc. NIO used its second-quarter 2026 earnings call to stress margin resilience, cash generation and a higher-volume fourth-quarter target despite rising input costs. NIO reported a loss of $0.04 per ADS compared with the Zacks Consensus Estimate of a $0.07 loss, a 42.9% surprise. Revenues of $4.7364 billion missed the consensus mark of $4.7806 billion by 0.9%. NIO Inc. price-consensus-eps-surprise-chart | NIO Inc. Quote Chief financial officer Stanley Qu said vehicle margin held at 18.5% in the second quarter as input costs rose about RMB14,000 per vehicle compared with late 2025. CFO Qu expects material costs to rise another RMB2,000 to RMB3,000 in the second half. Management still aims to keep vehicle gross margin around the second-quarter level in both the third and fourth quarters. Responding to a UBS analyst, CEO Bin Li said the ES8 and ES9 each carry vehicle margins above 20%, while supply-chain negotiations and product-level cost work remain central to profitability. NIO guided third-quarter deliveries to 108,000 to 111,000 vehicles and revenues to RMB33.285 billion to RMB34.051 billion, representing revenue growth of 52.7% to 56.2% year over year. During the HSBC Q&A, CEO Li said NIO expects the passenger vehicle market to recover in the fourth quarter and targets average monthly deliveries above 40,000 units. For the mid and long term, CEO Li said the company is targeting annual volume growth of about 40% to 50%, supported by its products and sales service coverage. A Deutsche Bank analyst pressed management on the durability of ES8 and ES9 demand. CEO Li said the ES8 delivered about 10,099 units in August and was on track to pass 150,000 cumulative deliveries in September. CEO Li added that ES9 buyers face waits of roughly three to four months. About three-quarters of ES9 users are new to the NIO community. The flagship models also matter to economics. In the UBS exchange, CEO Li identified the ES8 and ES9 as major contributors to product mix and vehicle margin. A Morgan Stanley analyst questioned ONVO's slower order momentum relative to NIO and FIREFLY. CEO Li acknowledged heavier competition in ONVO's segment but said conversion from sales leads to orders was good. CEO Li identified brand awareness as the bigger constraint. NIO plans to expand Sky stores, deepen targeted offline engagement and add another major ONVO product next year. CEO Li said ONVO will retain its premium, family-oriented positioning rather than push aggressively into entry-level pricing. The company intends to balance volume with vehicle gross margin. CFO Qu said full-year capital spending should remain roughly flat from 2025 at RMB6 billion to RMB7 billion, focused on product development and the sales and service network rather than major factory capacity. NIO still plans 1,000 new swap stations this year, but CFO Qu said new infrastructure is expected to be funded by Power Up partners. Management also expects positive operating and free cash flow in both the third and fourth quarters. CFO Qu said non-GAAP R&D spending should run about RMB2.5 billion per quarter. Non-GAAP SG&A is expected at roughly 10% to 11% of second-half revenues after about RMB500 million of launch-related one-time costs in the second quarter. Management centered the outlook on sustaining growth without broad price cuts to chase volume. CEO Li and CFO Qu tied execution to premium positioning, product mix and cost optimization. The company maintained its battery-electric vehicle strategy and continued expanding charging and swapping infrastructure while seeking capital efficiency through partnerships. The operating framework is to defend margins, preserve positive cash generation and scale deliveries through a broader three-brand portfolio. NIO currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Under the Zacks framework, top-ranked stocks paired with favorable Style Scores have stronger near-term performance potential, and NIO has a Growth Score of A, Momentum Score of B and VGM Score of A. Its Value Score of C is less favorable than its other style readings, while the VGM Score of A reflects a strong combined profile. The Zacks Rank can change as analyst earnings estimates are revised following the newly reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIO Inc. (NIO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: RMB32.1 billion, up 69.1% year-over-year and 25.9% quarter-over-quarter. Vehicle Sales: RMB29.1 billion, up 80.1% year-over-year and 27.5% quarter-over-quarter. Other Sales: RMB3.1 billion, up 7.2% year-over-year and 12% quarter-over-quarter. Vehicle Gross Margin: 18.5%, compared with 10.3% in Q2 last year and 18.8% last quarter. Overall Gross Margin: 18.4%, versus 10% in Q2 last year and 19% last quarter. R&D Expenses: RMB2.1 billion, decreased 28.7% year-over-year and increased 13.8% quarter-over-quarter. SG&A Expenses: RMB4.4 billion, increased 11.6% year-over-year and 22.5% quarter-over-quarter. Loss from Operations: RMB0.3 billion, down 92.9% year-over-year and up 12.4% quarter-over-quarter. Adjusted Profit from Operations: RMB0.2 billion, excluding share-based compensation expenses. Net Loss: RMB0.5 billion, a decrease of 89.4% year-over-year and an increase of 59% quarter-over-quarter. Adjusted Net Profit: RMB26.1 million, excluding share-based compensation expenses. Cash Position: RMB56.7 billion in total cash, cash equivalents, restricted cash, short-term investments, and long-term time deposits. Deliveries: 107,658 smart EVs in Q2, achieving year-over-year growth of 49.4%. Q3 Delivery Outlook: Expected to range between 108,000 and 111,000 units. Warning! GuruFocus has detected 3 Warning Signs with NIO. Is NIO fairly valued? Test your thesis with our free DCF calculator. Release Date: September 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Delivered 107,658 vehicles in Q2 2026, a 49.4% year-over-year increase, with all three brands (NIO, ONVO, FIREFLY) achieving growth in sales and average transaction price. Achieved a gross margin of 18.4% and a vehicle margin of 18.5%, driven by a favorable product mix and cost optimization, despite rising raw material and chip costs. Reported a non-GAAP operating profit and positive operating and free cash flow, increasing cash reserves to RMB56.7 billion. Strong demand for flagship models ES8 and ES9, with ES9 orders requiring a 3-4 month wait and ES8 surpassing 140,000 deliveries in 335 days, leading the premium SUV segment. Rolled out the latest NIO World model smart driving system to over 700,000 users, increasing urban NOP mileage by 9.8% for NIO users and 127.8% for ONVO users. Expanded the power network to 4,123 swap stations, including the first fifth-generation station, which supports all three brands and has a lower cost per station (RMB1.4 million) than the previous generation. Facing significant cost pressure from rising raw material and chip costs, with an average cost increase of RMB14,000 per vehicle in Q2, expected to rise by another RMB2,000-3,000 in Q3 and Q4. ONVO brand's sales momentum has moderated due to intense competition in its segment, with brand awareness still low, comparable to NIO's level five to six years ago. Net loss increased 59% quarter-over-quarter to RMB0.5 billion, despite a year-over-year improvement, due to higher SG&A expenses from new product launches. SG&A expenses rose 22.5% quarter-over-quarter, driven by one-off sales and marketing costs of approximately RMB500 million, which may pressure near-term profitability. Q3 delivery guidance of 108,000-111,000 units implies a sequential decline from Q2's 107,658 units, indicating potential slowdown in growth momentum. The company's R&D expenses decreased 28.7% year-over-year, which may raise concerns about future innovation and competitiveness in the rapidly evolving EV market. Q: Can you expand on the order flow sustainability for the ES8 and ES9 SUVs, and how NIO differentiates itself in the high-end premium SUV market?A: William Li (CEO) stated that demand for the ES8 and ES9 remains strong. The ES8 delivered around 10,099 units in August and surpassed 140,000 deliveries in 11 months, with a 150,000 milestone expected in September. The ES9 has a 3-4 month waiting period for the Horizon and Signature Editions, and incremental orders grew from July to August. Notably, 3/4 of ES9 users are new to NIO. He attributed this success to four factors: 1) industry-leading technology innovation, 2) precise product design catering to premium users' business and family needs, 3) a holistic experience enabled by the charging/swapping network and top-tier after-sales service, and 4) a shift in the market from brand ambiguity to brand clarity, where NIO has established a solid foothold as the natural choice for premium BEV buyers. He highlighted that the NIO brand's average selling price was RMB406,000 in Q2 and over RMB430,000 in July, ranking first among mainstream premium brands. Q: What is the vehicle gross margin outlook for the next two quarters given ongoing cost inflation, particularly in memory costs?A: Stanley Qu (CFO) acknowledged pressure from rising material costs (memory chips, batteries, bulk materials), which have increased costs by an average of RMB14,000 per car since late Q4 last year. Despite this, the company stabilized vehicle margin at 18.5% in Q2 through stable pricing and supply chain optimization. He expects material costs to rise another RMB2,000-3,000 in the second half, but the company aims to stabilize gross margin at the same level in Q3 and Q4 through long-term mitigation measures. Q: What gives management confidence that the significant improvement in profitability is sustainable rather than a one-off?A: Stanley Qu (CFO) cited several factors: 1) The shift to brand-driven competition benefits NIO, with the ES8 and ES9 maintaining stable demand and contributing over 20% vehicle margins each. 2) Continuous cost structure optimization through precise product definition and supply chain collaboration. 3) Despite cost pressures, the company achieved high-quality growth in H1 2026, with sales volume up 67% YoY, revenue up 86% YoY, and gross profit up 282% YoY. He emphasized that even with an additional RMB16,000-17,000 cost burden per car in H2 compared to Q4 last year, the company still aims for steady gross profit growth, demonstrating its system capabilities. Q: Can you provide details on the ONVO brand's performance and plans to improve its sales momentum, which has moderated compared to NIO and FIREFLY?A: William Li (CEO) acknowledged ONVO operates in a more competitive market. However, he highlighted its achievements: an average selling price of RMB240,000 in H1, making it one of only 8 brands in China to grow both sales volume and ASP. He noted ONVO's challenge is brand awareness, which is comparable to NIO's level 5-6 years ago. The company's actions include: 1) expanding brand awareness through collaborations and offline activities, 2) rolling out Sky stores to host NIO, ONVO, and FIREFLY brands under one roof to reach lower-tier cities, and 3) introducing new ONVO products. He stressed ONVO will maintain its premium family-oriented positioning and balance sales volume with vehicle gross margin, targeting the vacancy in the market for upscale family vehicles comparable to Toyota or Volkswagen's premium lines. Q: What is the company's cash burn, including CapEx and R&D, and what is the expected free cash flow by year-end? Where will the cash be invested?A: Stanley Qu (CFO) provided details: 1) Full-year CapEx is expected to be flat at roughly RMB6-7 billion, mainly for product R&D and sales/service network rollout, not factory capacity. 2) The company plans to build 1,000 new power swap stations this year, but through the Power Up partner plan, all new infrastructure is expected to be sponsored by partners (over 40 SOEs, platforms, and financial institutions across 25 provinces). 3) The battery-as-a-service business is gaining financial support, with amounts due from the battery asset management company reduced from over RMB16 billion to less than RMB15 billion. He expects positive operating and free cash flow to continue in Q3 and Q4, further strengthening the cash position. Q: How does NIO differentiate its ADAS/autonomous driving features from peers, and will the company consider different payment options like pay-as-you-go or subscriptions?A: William Li (CEO) highlighted the advantages of NIO's architecture featuring the NIO World Model, closed-loop reinforcement learning, and collective intelligence, which achieves good experience with relatively small computing investment. He noted that on June 18, the latest version was pushed to over 700,000 users across brands and platforms simultaneously. For Cedar users (3rd-gen platform with NX-931 chip), 58% engage smart driving for over half their trips. Regarding the business model, new users get a 5-year complimentary subscription, but used car users pay RMB380/month, with a penetration rate of around 20%. He stated this is a sizable and growing revenue source, currently generating several thousands of millions of RMB annually. Q: Can you provide details on the fifth-generation battery swap station's CapEx, maintenance costs, and the pricing strategy for opening the network to other OEMs?A: Stanley Qu (CFO) stated the Gen-5 station has a flexible design compatible with all NIO, ONVO, and FIREFLY models. Excluding batteries and high-voltage power supply costs, the station itself costs around RMB1.4 million, about RMB100,000 cheaper than Gen-4. Operational efficiency has improved, with first-time success rates up 50% compared to earlier last year. For OEM partnerships, the company charges an admission fee for access to the power swap network, with details still under discussion. He noted that as robotaxis become popular, power swap infrastructure is seen as good support, and more OEMs embracing swappable vehicles will help optimize and amortize operating costs. Q: Can you provide guidance for 2026 operating expenses, particularly the higher sales and marketing expenses in Q2?A: Stanley Qu (CFO) For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in NIO Inc.? Here are five stocks we like better. NIO delivered strong second-quarter growth, with vehicle deliveries rising 49.4% year over year to 107,658 and revenue increasing 69.1% to RMB32.1 billion. Vehicle margin improved to 18.5%, while the operating loss narrowed sharply and adjusted net profit reached RMB26.1 million. Management forecast third-quarter deliveries of 108,000 to 111,000 vehicles and is targeting monthly deliveries above 40,000 in the fourth quarter. However, higher costs for batteries, memory chips and other materials are expected to add RMB2,000–RMB3,000 per vehicle in the second half. NIO plans to maintain investment in product development and its battery-swapping network, including 1,000 new swap stations this year, while targeting positive operating and free cash flow in the second half. The company ended the quarter with RMB56.7 billion in cash and related investments. EVs Are Big Winners of the Iran War—Just Not American Ones NIO (NYSE:NIO) reported second-quarter 2026 vehicle deliveries of 107,658, up 49.4% from a year earlier, as revenue rose 69.1% to RMB32.1 billion and the company narrowed its operating and net losses. Founder, Chairman and Chief Executive Officer William Li said all three of the company’s brands—NIO, ONVO and Firefly—recorded year-over-year and sequential increases in sales volume and average transaction prices during the quarter. NIO delivered 60,945 vehicles, ONVO delivered 29,124, and Firefly delivered 17,589. → OneMain’s Yield Comes With a Catch AI’s Biggest Bottleneck Could Make These 2 Stocks Soar The company delivered 35,534 vehicles in July and 35,836 in August. NIO forecast third-quarter deliveries of 108,000 to 111,000 units. Management also said it is targeting average monthly deliveries above 40,000 units in the fourth quarter, assuming a recovery in China’s passenger-vehicle market. Chief Financial Officer Stanley Qu said vehicle sales totaled RMB29.1 billion, an 80.1% year-over-year increase, driven by higher deliveries and a more favorable product mix that lifted average selling prices. Other sales increased 7.2% to RMB3.1 billion, supported by parts, accessories and after-sales services, partly offset by lower used-car and technical R&D-service revenue. → Apple’s Foldable iPhone Could Be a Catalyst, But Not a Cure-All MarketBeat Week in Review – 03/09 - 03/13 Vehicle margin was 18.5%, compared with 10.3% a year earlier and 18.8% in the first quarter. Overall gross margin was 18.4%, up from 10% in the prior-year quarter but slightly below 19% in the preceding quarter. Qu said the year-over-year margin improvement reflected the product mix, while the modest sequential decline resulted from margins in vehicle sales, power solutions, and parts and after-sales services. R&D expense was RMB2.1 billion, down 28.7% year over year but up 13.8% sequentially. SG&A expense was RMB4.4 billion, up 11.6% from a year earlier and 22.5% from the first quarter, reflecting product-launch marketing activity and higher personnel-related costs. Operating loss narrowed 92.9% year over year to RMB300 million. On a non-GAAP basis, adjusted profit from operations was RMB200 million. Net loss was RMB500 million, while adjusted net profit, excluding share-based compensation, was RMB26.1 million. → Strike a Balance Between Growth and Stability With These 3 Names Ready to Rally NIO said it generated positive operating cash flow and free cash flow during the quarter. Its cash balance, including cash equivalents, restricted cash, short-term investments and long-term time deposits, rose to RMB56.7 billion. Management said rising costs for memory chips, batteries and other materials increased average vehicle costs by about RMB14,000 in the second quarter compared with late 2025. Li said NIO expects an additional RMB2,000 to RMB3,000 per-vehicle cost increase in the second half. Despite those pressures, Li said the company aims to maintain vehicle gross margin in the third and fourth quarters at about the second-quarter level. NIO intends to offset cost inflation through stable pricing, supply-chain optimization, commercial negotiations and value-analysis/value-engineering measures. Li said the ES8 and ES9 are important to the company’s margin profile, noting that both models generate vehicle margins above 20%, according to management. He also cited strong demand for the flagship SUVs, with certain ES9 variants carrying delivery wait times of more than three months. For operating expenses, Qu said NIO expects non-GAAP R&D spending to remain around RMB2.5 billion per quarter in 2026, subject to project timing. The company expects non-GAAP SG&A as a percentage of revenue to decline to 10% to 11% in the second half from roughly 13% in the first half. Qu attributed about RMB500 million of second-quarter SG&A to one-time launch-related spending. Li said ONVO faces more intense competition than the NIO and Firefly brands, but management views brand awareness—not product conversion—as its principal challenge. ONVO’s average transaction price exceeded RMB240,000 in the first half, according to Li. The company plans to expand awareness through collaborations, offline events, community engagement and additional shared “Sky” stores serving NIO, ONVO and Firefly customers. NIO said it plans new products from its NIO 5 and 6 series next year, along with a strategic new ONVO model. Firefly will retain a single-model strategy while introducing special editions and technology upgrades. The company also highlighted an expanded smart-driving software release on June 18, which it said reached more than 700,000 NIO and ONVO users. Li said Urban NOP+ mileage increased 92.8% among NIO users and 127.8% among ONVO users after the update. NIO currently offers five years of complimentary smart-driving service for new NIO and ONVO vehicles. For used-car customers, the company charges RMB380 per month, and Li said adoption among that group is near 20%. He said the business currently generates subscription revenue in the tens of millions of RMB annually. NIO had 4,123 battery-swap stations and 30,294 chargers and destination charging points worldwide. Its first fifth-generation station began operation Aug. 7 and can support vehicles from all three brands. Qu said the station itself costs about RMB1.4 million, excluding batteries and high-voltage power infrastructure, or roughly RMB100,000 less than a fourth-generation station. The company expects full-year capital expenditures of RMB6 billion to RMB7 billion, broadly in line with last year, primarily for vehicle development and sales-and-service network expansion. NIO still plans to build 1,000 swap stations this year, with management saying partner funding is expected to cover the year’s new charging and swapping infrastructure projects. Qu said NIO expects to sustain positive operating and free cash flow in the third and fourth quarters and believes its cash position can continue to improve in the second half. NIO Inc is a pioneer in the premium electric vehicle (EV) segment, dedicated to the design, development and manufacture of smart, high-performance EVs. Established in November 2014 and headquartered in Shanghai, China, the company focuses on integrating cutting-edge electric propulsion, advanced connectivity and autonomous driving technologies into its automotive platforms. NIO's vision centers on creating a holistic user experience that extends beyond the vehicle itself, encompassing energy services and digital solutions. The company's product lineup includes flagship SUVs and sedans such as the ES8, ES6, EC6, ET7 and ET5, each engineered to deliver strong performance, long range and a suite of intelligent driver-assistance features. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NIO Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Electric vehicles (EVs) have had a rough ride over the last two years in the U.S., with major carmakers like Ford and Honda curtailing EV production, or even canceling some EV models outright. That stands in sharp contrast to the rest of the world, particularly China, where EV carmakers – juiced by government incentives and an opportunity to seize market share from dominant U.S. and European brands – are flourishing after years of early stage struggles. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » One Chinese EV maker, Nio (NYSE:NIO), has been hit particularly hard over the last five years. But its upcoming earnings report could send the stock soaring. Here's why Nio's upcoming earnings report could be a game changer for its shareholders. Image source: The Motley Fool. Although battery-powered electric vehicles (BEVs) are cheaper to operate and maintain than gasoline or hybrid vehicles, there are two important metrics on which they aren't yet competitive with their fossil-fuel-powered brethren: cost and refueling time. BEVs generally cost thousands of dollars more than comparable gas-powered vehicles or hybrids, and powering them to a full charge, even at a high-powered DC fast-charging station, takes 20 to 60 minutes, far longer than filling up at a gas station. Nio has come up with a unique solution for these problems. Instead of including the batteries in the purchase price of a Nio vehicle, Nio allows buyers to subscribe to a "Battery-as-a-Service" feature for a monthly fee. Image source: Getty Images. Paying the fee allows drivers to visit a special Nio "battery swap" station where they swap their depleted battery array for a fully charged one. The process takes only a few minutes, comparable to the time it takes to fill a gas tank. This system allows Nio to advertise a lower sticker price for its vehicles and lock in a recurring revenue stream from the battery-swap service. The only problem for Nio is that, for the battery swap service to be a viable option, it needs to build and maintain a network of battery swap stations, which entails high upfront costs. Nio's shares bottomed out at $3.14/share in early 2025. After it posted a quarterly net profit for the first time, the stock jumped to $6.87/share in April, but has since fallen back to $4.38/share, down 93% from its all-time high. Despite the decline in its share price, Nio's trailing twelve-month (TTM) revenue has skyrocketed this year to $14.3 billion. That's because Nio's vehicle deliveries have been soaring. As of July 31, Nio had delivered 227,057 vehicles, a 68% increase from July 2025. But revenue growth has never been a problem for Nio. Profitability has. Nio's TTM net losses had been moving in the wrong direction for almost a decade, hitting a low point of -$3.4 billion in Q3 2025. Since then, the company has seen remarkable improvement in its bottom line. It even managed to squeak out a net profit of $17.1 million in Q4 2025, only to post a net loss again in Q1 2026. That single quarter of net profit immediately caused a 20% jump in the company's stock price. Over the next several weeks, it continued to climb to a 45.6% gain. But the return to a net loss in Q1 had the exact opposite effect: an immediate plunge in share price, followed by months of declines. If Nio's management announces a net profit in its Q2 earnings report on Tuesday, investors should expect the stock to immediately pop, just like it did in Q4. Before you buy stock in Nio, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nio wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 29, 2026. John Bromels has positions in Ford Motor Company and Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NIO's Next Earnings Report on September 1 Could Send the Stock Soaring. Here's Why. was originally published by The Motley Fool

China-based EV company NIO Inc. NIO is slated to release second-quarter 2026 results on Sept. 1, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a loss of 7 cents a share on revenues of $4.78 billion. The loss estimate for the second quarter of 2026 has remained stable over the past 60 days. The bottom-line projection indicates an improvement from a loss of 32 cents reported in the year-ago period. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 80%. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NIO’s 2026 revenues is pegged at $19.24 billion, implying a rise of 56% year over year. The consensus mark for the 2026 bottom line is pegged at a loss of 10 cents per share, indicating an improvement from a loss of 98 cents/share incurred in 2025. For 2027, the consensus mark for NIO’s top and bottom line implies an improvement of 19.5% and 195%, respectively, from projected 2026 levels. In the trailing four quarters, NIO surpassed EPS estimates thrice and missed on the other occasion, with the average earnings surprise being 53.3%. NIO Inc. price-eps-surprise | NIO Inc. Quote Our proven model does not conclusively predict an earnings beat for NIO this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. NIO has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. For the three months ended June 30, NIO delivered 107,658 vehicles, representing a 49.4% increase year over year but missing its own guided range of 110,000-115,000 units. Second-quarter deliveries consisted of 60,945 units from the NIO brand, 29,124 units from the ONVO brand and 17,589 from Firefly. NIO’s second-quarter vehicle growth rate stands out against its closest peers Li Auto LI and XPeng Inc. XPEV. Li Auto delivered 98,330 vehicles in the June quarter, down roughly 12% from the year-ago period. Meanwhile, XPeng saw its second-quarter deliveries rise to 103,295 units, a modest increase from 103,181 units in the second quarter of 2025. NIO’s revenues for the quarter to be reported are expected to have benefited from increased deliveries. Our model estimates point to year-over-year growth of 69% in vehicle sales revenues in the to-be-reported quarter. On the flip side, commodity inflation is expected to have put pressure on margins. The company had already cautioned that increasing prices for memory chips, lithium carbonate, NCM battery materials, copper and aluminum might raise vehicle costs from the second-quarter of 2026. NIO expects second-quarter vehicle margins at 17-18%, down from 18.8% recorded in the first quarter. Year to date, shares of NIO have declined 14%, outperforming the industry, Li Auto and XPeng. Image Source: Zacks Investment Research From a valuation perspective, NIO currently trades at a forward price-to-sales ratio of 0.5, below Li Auto and XPeng. Image Source: Zacks Investment Research Despite near-term pressure on margins, NIO’s overall outlook is becoming increasingly attractive, supported by strong product momentum and margin expansion. Its refreshed vehicle lineup is emerging as a key growth driver. The All-New ES8 has gained significant traction since deliveries began in September 2025, with cumulative deliveries surpassing 120,000 units by June 22, 2026. The ES9 launch in May has further strengthened the company’s demand outlook. Although vehicle margins are expected to decline sequentially in the to-be-reported quarter, the longer-term trend remains positive. Higher volumes and a richer product mix have supported margin expansion, with NIO targeting a 17%-18% vehicle margin in 2026, compared with 14.6% in 2025. NIO’s battery-swap network remains another key competitive advantage. With more than 3,900 swap stations and 28,000 charging points, the company offers greater convenience while its Battery-as-a-Service model can reduce upfront ownership costs. Overall, strong product demand, improving profitability and its differentiated battery-swap ecosystem make NIO stock worth buying now. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIO Inc. (NIO) : Free Stock Analysis Report Li Auto Inc. Sponsored ADR (LI) : Free Stock Analysis Report XPeng Inc. Sponsored ADR (XPEV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research