NIO CEO William Li prioritizes profit margins over sales volume

NIO founder and CEO William Li has emphasized a shift toward “high-quality growth,” prioritizing revenue growth and gross profit margins over simple sales volume rankings. During a second-quarter earnings briefing, Li noted that NIO’s average transaction price in July reached 434,600 yuan, surpassing luxury competitors Mercedes-Benz, BMW, and Audi.

Financial reports indicate a period of recovery for the company. In the first half of the year, NIO reported revenue of 57.67 billion yuan, an 85.8% year-on-year increase. While the company still faced a net loss of 528 million yuan, it achieved a Non-GAAP net profit of 26.1 million yuan, marking its third consecutive quarter of profitability under this metric. Cash reserves have also risen to 56.7 billion yuan.

Looking forward, Li addressed speculation regarding the Onvo brand, stating that while strategic new models are in development, the brand will focus on high-quality family vehicles to compete with brands like Toyota and Volkswagen rather than pursuing a low-price strategy. Despite recent financial improvements, the company issued conservative guidance for the third quarter, which impacted stock performance.