By Jiahui Huang


Chinese electric-vehicle maker NIO reported a smaller net loss in the third quarter, reversing a recent widening trend, as sales and margins improved significantly despite stiff competition in the world's largest auto market.

The Shanghai-based company on Tuesday said its net loss narrowed to 3.66 billion yuan, equivalent to $515.3 million, from 5.14 billion yuan a year earlier. That was better than the 3.71 billion yuan estimate of analysts polled by Visible Alpha.

Its revenue rose 17% to 21.79 billion yuan, slightly below the market consensus of 22.14 billion yuan from Visible Alpha.

The improved bottom line comes as the Chinese EV maker's sales momentum is picking up, alleviating investors' concerns about its path to profitability following four consecutive quarters of widening losses.

The EV maker delivered 40,397 units in October, a third straight monthly record and the first time it crossed the 40,000 mark. In the third quarter, it delivered 41% more vehicles than in the prior year, with the 87,071 units sold meeting its guidance.

NIO said its gross margin reached 13.9% in the latest quarter, an improvement from 10.7% a year earlier, which it attributed to higher vehicle margin, supported by lower material costs per unit.

The company is considered one of the top three emerging Chinese EV brands, alongside XPeng and Li Auto. XPeng has witnessed robust sales growth and looks on course to become profitable in the fourth quarter. Li Auto is already profitable, though recent weaker sales have weighed on earnings.

The road to profitability for NIO remains unclear. On an earnings call in September, the company's executives said the automaker aimed to break even on an adjusted basis in the fourth quarter.

In the final quarter of the year, the company said it expects to deliver between 120,000 vehicles and 125,000 vehicles and revenue of 32.76 billion yuan to 34.04 billion yuan, up 66%-73% from the previous year.

The market has already priced in NIO's positive sales momentum for its recent models, with its Hong Kong-listed stock rising 35% since the ONVO L90 was launched at the end of July. Whether the company reaches profitability as hoped will depend on its fourth-quarter sales and its ability to control costs.

NIO has tried to set itself apart in China's crowded EV space by focusing on advancing battery technology. It relies on battery-swapping stations rather than battery-charging ones for better efficiency, but the former requires higher setup costs.

The EV maker also appears to be changing its core strategy. It has moved more into the mass-market premium segment, where it will compete with the likes of Chinese peer Xiaomi and U.S.-based Tesla, shifting away from the high-end segment, where German automakers ply their trade, according to Eugene Hsiao, head of China equity strategy at Macquarie Capital.

NIO's American depositary receipts were recently about 2.5% higher in premarket trading after the earnings release.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

11-25-25 0637ET