Fortunes turn for NEV startups as sales grow

Despite the high research and development and distribution costs that once led to sustained losses for China's new energy vehicle startups, the situation is improving. Some companies are now seeing profits, and others are on the verge of doing so, thanks to improved economies of scale and cost control.

Nio posted its best quarterly financial report ever on Tuesday, on its 10th anniversary, with several metrics reaching record highs.

Its third-quarter financial report shows that Nio's revenue reached 21.79 billion yuan ($3.07 billion), up 16.7 percent and 14.7 percent quarter-on-quarter, setting a record. Of that, vehicle sales accounted for 19.2 billion yuan, with a year-on-year growth of 15 percent and a quarter-on-quarter growth of 19 percent.

Through cost optimization and the delivery of more high-margin models, its Q3 vehicle gross margin rose to 14.7 percent from 10.3 percent in Q2.

These narrowed Nio's losses, with a net loss of 2.74 billion yuan in Q3, down 38 percent year-on-year and 33.7 percent quarter-on-quarter.

With the combined efforts of its three brands — Nio, Onvo and Firefly — the company delivered 87,071 vehicles in Q3, up 40.8 percent year-on-year and 20.8 percent quarter-on-quarter, setting a record.

Nio has set a delivery goal of 120,000 to 125,000 units — representing a year-on-year growth of 65.1 percent to 72 percent — and aims to achieve profitability in Q4.

CEO William Li emphasized that the main reason for this optimism is the demand for high-priced, high-margin models like the new ES8. The company still has a substantial backlog of orders for these vehicles.

Furthermore, Nio aims to reach monthly sales of 50,000 units in 2026 and achieve full-year profitability by that year.

Li noted that with the newly launched Onvo L90 and the Nio ES8, along with three large models, including the Onvo L80, to be introduced in 2026, sales are expected to be substantial. These models are anticipated to contribute a significant share of Nio's deliveries and enhance its gross margin.

XPeng's Q3 financial report also shows that it achieved record highs in delivery volume, revenue and gross margin. Its Q3 revenue reached 20.38 billion yuan, representing a year-on-year increase of 101.8 percent and a quarter-on-quarter rise of 11.5 percent.

Its auto business contributed 88.5 percent of the total revenue during Q3, with deliveries reaching 116,007 units — jumping 149.3 percent year-on-year and 12.4 percent quarter-on-quarter.

XPeng's auto business achieved a gross margin of 13.1 percent in the third quarter, marking a year-on-year increase of 4.5 percentage points. When including the AI business, the company's overall gross margin rose to 20.1 percent.

XPeng reported a net loss of 380 million yuan, which is an improvement compared to the net loss of 480 million yuan in the second quarter.

The automaker expects Q4 deliveries to be between 125,000 and 132,000 units, with revenue ranging from 21.5 billion to 23 billion yuan.

XPeng CEO He Xiaopeng said that the company is expected to break even in Q4.

The automaker plans to launch three extended-range models in the first quarter of 2026 and will start trial operations of three Robotaxi models next year.

Starting from Q4 2024, Leapmotor began achieving profitability and maintained a positive net profit of 150 million yuan in Q3 2025.

The company delivered 173,852 vehicles during Q3 2025, ranking first among Chinese NEV startups and representing a 101.8 percent increase year-on-year.

Leapmotor's revenue reached 19.45 billion yuan, a year-on-year increase of 97.3 percent. Additionally, the gross profit margin improved significantly to 14.5 percent.

The company achieved its 2025 sales target of 500,000 units ahead of schedule in mid-November and aims to reach a new sales target of 1 million units in 2026.

However, Li Auto, the earliest Chinese NEV startup to be profitable, experienced a decline in key metrics like delivery volume and revenue.

Due to factors including costs associated with the recall of its Mega MPV and supply chain bottlenecks, the company ended its streak of profitability — which had lasted since the fourth quarter of 2022 — resulting in a return to losses.

According to its Q3 report released on Wednesday, it delivered 93,211 vehicles, down 39 percent year-on-year. Revenue was 27.4 billion yuan, down 36.2 percent year-on-year.

It reported a net loss of 624.4 million yuan, in contrast to a net profit of 2.8 billion yuan in the same quarter of 2024.

Li Auto expects vehicle deliveries for the fourth quarter to be between 100,000 and 110,000 units, a year-on-year decrease of 37 to 30.7 percent.

caoyingying@chinadaily.com.cn