China's NIO Narrows Loss on EV Sales Growth, Expects Volume Pickup — Update

By Jiahui Huang

Chinese electric-vehicle maker NIO reported a narrower quarterly loss, thanks to robust deliveries and its premium positioning, and signaled that momentum was building despite a tepid start to the third quarter.

NIO has been working to cut costs and improve profitability after years of heavy spending on new technologies, battery-swapping infrastructure and expanding of its vehicle lineup. The company's first profitable quarter at the end of last year proved short-lived as it returned to a loss at the beginning of 2026.

To drive growth, the carmaker has increasingly relied on its newer and higher-volume models. It has also sought to broaden its customer base with its ONVO and Firefly brands, which cater to the midrange and premium-compact EV segments, respectively.

The Shanghai-based company on Tuesday said its second-quarter net loss narrowed to 721.6 million yuan, equivalent to about $107 million, from 5.14 billion yuan a year earlier. Revenue climbed 69% to 32.14 billion yuan as it delivered nearly 50% more vehicles during the quarter, though sales volume fell short of guidance.

Both its top and bottom lines missed market expectations. Analysts had expected a 558.4 million yuan loss on revenue of 33.71 billion yuan, according to a Visible Alpha-compiled consensus.

NIO's shares earlier ended 6.4% lower in Hong Kong, after the EV maker logged a 0.3% drop in sales last month from July, the second straight month of declines. The company's new flagship ES9 sport-utility vehicle has enjoyed strong sales, but that hasn't satisfied investors, who are watching to see if it can maintain business momentum and turn it into sustainable profitability in an overcrowded market.

Despite the back-to-back sales drop, the company guided for a sequential increase in deliveries, which could help boost market sentiment. It targeted 108,000 to 111,000 vehicle deliveries this quarter, up slightly from the three months ended June and about a quarter more than it sold the year prior. It also forecast strong third-quarter revenue of between 33.29 billion yuan and 34.05 billion yuan, a more than 50% increase from a year earlier.

For the second quarter, its gross margin was 18.4%, while its vehicle margin reached 18.5%, thanks to a better product mix.

"Supported by strong sales of higher-margin models and ongoing optimization of our cost structure, we maintained healthy gross and vehicle margins despite rising cost pressures," NIO Chief Financial Officer Stanley Yu Qu said.

Still, NIO, like many Chinese automakers, has looked abroad for expansion to sustain growth. However, its international ambitions have yet to translate into meaningful sales.

The company has adopted a more asset-light approach for its overseas business, increasingly relying on local distributors to enter new markets across Europe, Asia and Latin America.

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

(END) Dow Jones Newswires

September 01, 2026 08:10 ET (12:10 GMT)