NIO reported its second-highest quarterly deliveries and revenue on record, behind only Q4 2025. Deliveries reached 107,658 and revenue rose 69.1% year over year to RMB32.14 billion. Vehicle margin held near its recent high at 18.5%, allowing NIO to remain non-GAAP profitable for a third consecutive quarter. The cushion, however, is extremely thin. Adjusted net profit fell to RMB26.1 million, equal to only 0.08% of revenue, while the GAAP net loss widened sequentially to RMB528.0 million. Management expects additional material-cost pressure in the second half, making margin protection and expense discipline more important than the headline growth rate.
Deliveries recovered strongly but still fell short of guidance. Q2 deliveries reached 107,658 vehicles, 2,342 units or approximately 2.1% below the low end of NIO's own 110,000–115,000 guidance range. The miss is derived directly from NIO's published guidance and reported deliveries. The shortfall reinforces the need to judge future guidance against actual monthly execution.
Vehicle margin is the structural achievement of the past year, though it has stopped climbing sequentially. Vehicle margin, the profit NIO keeps on each car after production cost, reached 18.5% against 10.3% in the same quarter of 2025, an 820 basis point improvement. It slipped 30 basis points from Q1's 18.8%, meaning the trend is now stabilizing rather than continuing to expand.
All three brands grew, and the mix is shifting. The NIO brand delivered 60,945 vehicles (56.6% of the total, by TheValueTrader calculation), ONVO delivered 29,124 (27.0%) and FIREFLY delivered 17,589 (16.3%). Management said each brand grew both volume and average transaction price, and NIO reported a favorable year-over-year product mix overall. ONVO's lower price positioning can dilute the group's blended margin as its share of deliveries increases, unless that effect is offset by stronger pricing, cost reductions or a favorable mix within the NIO brand.
NIO's operating and bottom-line results diverged this quarter. Adjusted operating profit, which excludes share-based compensation, rose from RMB66.8 million in Q1 to RMB206.9 million, a calculated adjusted operating margin of approximately 0.64% of revenue. Adjusted net profit, further down the income statement, moved the opposite way, falling 40% to RMB26.1 million, or roughly 0.08% of revenue.
The gap between adjusted operating profit and adjusted net profit was not caused by SG&A alone. Below the operating line, interest expense of RMB242.4 million, an interest and investment loss of RMB19.0 million, and RMB149.4 million in losses from equity investees more than offset RMB262.8 million of other income and RMB32.8 million of income tax expense, creating approximately RMB181 million of net non-operating and tax drag. On a GAAP basis the net loss widened to RMB528.0 million (RMB721.6 million attributable to ordinary shareholders, or a loss of RMB0.29 per ADS), a calculated GAAP net margin of approximately −1.64%. Adjusted net profit attributable to ordinary shareholders was RMB24.8 million, or RMB0.01 per ADS.
Sequentially, SG&A expense rose 26.5% to RMB4,424.5 million (RMB4,039.6 million adjusted) on new product launch activity. CFO Stanley Qu attributed roughly RMB500 million of that to one-time launch spending and guided SG&A down to 10% to 11% of revenue in the second half from about 13% in the first half.
That RMB26.1 million adjusted net profit equals roughly 0.08% of revenue. A swing of well under one percent in costs or pricing would erase it. NIO has reached non-GAAP operating breakeven for a third straight quarter, but not consistent GAAP profitability; the company remained GAAP loss-making in Q2.
Product momentum is the strongest part of NIO's case, though the following claims are as reported by management rather than independently verified. NIO stated the ES8 reached its 140,000th delivery within 335 days and that the NIO brand ranked first in China's passenger-vehicle market priced above RMB350,000 during the quarter. According to management, the ES9 executive SUV ranked first in sales among vehicles priced above RMB500,000 in both June and July, carried a three- to four-month order wait, and both the ES8 and ES9 generated vehicle margins above 20%. Management also said ONVO led the RMB200,000–RMB300,000 large-SUV segment and FIREFLY topped China's high-end small-car market for 15 consecutive months.
R&D expense fell 28.7% year over year to RMB2,144.9 million (RMB1,983.2 million adjusted), mainly from organizational optimization, though it rose 13.8% sequentially. Management expects non-GAAP R&D to normalize near RMB2.5 billion per quarter, above Q2's RMB1.98 billion adjusted level, which suggests some spending recovery rather than another comparable year-over-year reduction. NIO still plans 1,000 new battery-swap stations in 2026, but management said these are expected to be funded or sponsored by Power Up Partners, a network of more than 40 state-owned enterprises, platforms and financial institutions across 25 provinces and cities, putting a bare station's cost at roughly RMB1.4 million excluding batteries and high-voltage infrastructure. The direct capital burden on NIO should not be equated with the network's full construction cost; total 2026 capex is guided at roughly RMB6–7 billion.
NIO's total liquidity position, made up of cash and cash equivalents, restricted cash, short-term investments and long-term time deposits, reached RMB56.7 billion, up from approximately RMB45.9 billion at the end of 2025. That increase should not be attributed solely to operating cash generation. Short-term borrowings rose by approximately RMB3.47 billion to RMB8.16 billion, and inventory grew about 30% to RMB11.09 billion. Current assets of RMB89.25 billion exceeded current liabilities of RMB87.62 billion by only approximately RMB1.63 billion. Management said on the earnings call that operating and free cash flow were both positive in the quarter, though the results release did not disclose specific cash-flow figures.
NIO also raised RMB493 million across two funding rounds for its Shenji subsidiary at a post-money valuation of RMB12.25 billion, retaining a 59.95% controlling stake. The transactions did not involve issuing new NIO Inc. ADSs and so did not directly increase the parent company's public share count. They did, however, dilute NIO's economic ownership of Shenji while bringing in outside capital. Management said it believes existing resources are sufficient to fund operations for the next twelve months.
Third-quarter guidance calls for 108,000 to 111,000 deliveries (24.0% to 27.5% YoY) and RMB33.285 billion to RMB34.051 billion in revenue (52.7% to 56.2% YoY). At the midpoint that implies approximately 1.7% sequential delivery growth (109,500 units) and approximately 4.8% sequential revenue growth (RMB33.668 billion), a sharp slowdown from the 29.0% delivery jump just posted. July and August deliveries of 35,934 and 35,836 units mean September needs roughly 36,230 units to hit the low end (about 1.1% growth from August) or 39,230 units to hit the high end (about 9.5% growth). Management separately cited a fourth-quarter target of averaging more than 40,000 monthly deliveries, a stated management goal rather than formal guidance.
The harder test is cost. Management expects rising material costs, including memory chips and batteries, to add RMB2,000 to RMB3,000 per vehicle in the second half. This is a mechanical, before-the-fact calculation that excludes supplier negotiations, pricing, mix and scale offsets, so it should not be read as a forecast of the realized impact on net income. On that basis the range works out to approximately RMB216 million at the low end (108,000 × RMB2,000), RMB274 million at the midpoint (109,500 × RMB2,500), and RMB333 million at the high end (111,000 × RMB3,000). Even the low end is more than eight times this quarter's entire adjusted net profit of RMB26.1 million, a comparison of scale rather than a profit forecast.
Q2 confirmed that NIO's operating turnaround is real, but it also showed how little room the company has for error. Revenue, deliveries and year-over-year margins improved sharply, and adjusted operating profit rose from Q1. At the same time, adjusted net profit narrowed to almost zero, the GAAP loss widened, and Q3 delivery guidance points to much slower sequential growth. The next test is whether the company can protect an 18% vehicle margin, reduce SG&A and rebuild adjusted net profit while absorbing higher component costs, not simply whether it reports another technically profitable non-GAAP quarter.
Can NIO protect its vehicle margin and rebuild adjusted net profit while volume growth slows and component costs rise?
Company-reported figures are sourced from NIO's unaudited earnings releases. Management targets and operational commentary are attributed to the earnings call. Percentages not explicitly published by NIO are labeled as calculations. Market-price data are secondary-source data.