As the automotive industry continues to evolve, Nio, a prominent player in the electric vehicle market, is making strides towards profitability with its new ES8 SUV. The company recently confirmed that this model boasts a gross margin of 20%, a significant factor in its pursuit of a profitable quarter by the end of 2025.
During a media briefing, Nio’s co-founder and president, Lihong Qin, highlighted the financial success of the ES8, stating, “The ES8’s gross margin is 20%.” With an average selling price exceeding 400,000 yuan ($57,360), the company earns a substantial gross profit of 80,000 yuan ($11,470) per vehicle sold.
Supporting data from the China Passenger Car Association (CPCA) reveals that between September 21 and December 31, a total of 42,453 ES8 units were delivered, with 39,650 of these in the final quarter alone. This impressive performance suggests that Nio has accrued a profit of 3.17 billion yuan ($454.9 million) from the ES8 during this period.
Margins
Nio’s leadership is optimistic about the company’s financial outlook. Founder and CEO William Li has expressed confidence in achieving profitability, citing solid product gross margins. The fourth quarter vehicle gross margin hit the target range of 17% to 18%, as outlined in the prior earnings call.
In the earnings report for the July through September period, Nio reported a vehicle margin of 14.7%, marking a year-over-year increase of 1.3 percentage points and a sequential rise of 3 percentage points.
Li noted that cost optimization and savings identified in models like the ES8 and L90 are expected to extend to three upcoming models. He stated, “With five large models combined, we expect them to contribute to good product performance as well as on the margin levels, overall speaking, achieving 20% vehicle margin.”
The strategy of focusing on larger vehicles is seen as a driver for stronger margins. Li mentioned, “Selling one all-new ES8 equals selling several ET models,” highlighting the profitability differences even at the same production capacity.
Large SUVs
Nio is expanding its lineup with several large models, including the ES7 and ES9 SUVs and the Onvo L80. The flagship ES9 is set to debut on April 10, just ahead of the Beijing Auto Show. The Onvo L80, a five-seat variant of the L90, is also slated for release this year after a delay due to production focus on the ES8 and L90.
In addition, the brand plans to introduce a new LiDAR-equipped L90 in the second quarter. The L80 will offer both pure vision and LiDAR versions, unlike the vision-only L60 model.
Moreover, a revamped version of the ES7 is scheduled to launch in the third quarter, following its discontinuation in China due to weak demand. This underscores Nio’s commitment to adaptability and innovation in the competitive electric vehicle market.
Original Story at eletric-vehicles.com