Saying Goodbye to the 'Grim Reaper' — Has NIO (蔚来) Fully Turned the Corner and Taken Control?

Strong quarter, but the big question is sustainability

NIO (蔚来) reported a much stronger-than-expected fourth quarter: revenue of RMB 347 billion (34.7 billion), up 76% year‑on‑year and beating the street, with car sales revenue alone at RMB 316 billion. Net profit finally turned positive — RMB 120 million — and operating profit reached RMB 800 million, both above guidance. Short answer: the company looks to have arrested the decline. Longer answer: can it sustain this momentum?

How margins and cuts combined to flip profitability

Two forces did the heavy lifting. First, product mix: the high‑priced ES8 SUV exploded in sales, raising the average selling price to RMB 253,000 and lifting car gross margin to 18.1% (up 3.4 ppt). Second, cost discipline — aggressive cuts to selling & admin expenses (RMB 3.5bn in Q4) and R&D (RMB 2.0bn) — plus platform and supply‑chain savings. It has been reported that NIO replaced an Nvidia Orin‑x dependency with a homegrown NX9031 chip, lowering per‑car costs by about RMB 10,000; if true, that accelerates both margin improvement and semiconductor supply resilience amid rising tech geopolitics.

Guidance and the road ahead: product pipeline vs macro

NIO guided Q1 deliveries to 80–83k units (below some expectations) but still issued revenue guidance above consensus (RMB 24.5–25.2bn), reflecting continued ES8 mix strength. Management is bullish for 2026 — targeting roughly 50%+ growth (~500k cars) on a heavy product cadence (ES9, L80, expanded ES8 run and refreshes). Western readers: NIO’s Battery‑as‑a‑Service (BaaS) model also meaningfully reduces the taxable invoice base and buffers Chinese buyers from recent purchase‑tax cuts, a competitive edge in a market projected to grow single digits next year. But risks remain — industry headwinds from the tax cut “pain,” component shortages delaying some deliveries, and the broader slowdown in new‑energy vehicle growth. So has NIO fully taken control? For now, it looks like the Grim Reaper has retreated — but the company still has to prove it can scale margin gains and new launches while navigating macro and geopolitical crosswinds.