Chinese electric vehicle manufacturer NIO has set a new revenue record but still struggles with continuous losses and debt pressures. According to the company’s financial report, in 2025, it faced a net loss of over 14.9 billion yuan, with total accumulated losses of around 110 billion yuan over the past eight years. To cut costs, the company underwent massive layoffs of over 10,000 employees last year.
On April 10th, based on reports from China Securities Journal, Sina Finance, and Yema Finance, NIO released its 2025 annual report. The company achieved an operating income of 87.488 billion yuan, a 33.1% year-on-year increase, but still recorded a net loss of 15.571 billion yuan, an improvement from the 22.658 billion yuan loss in the previous year.
In 2025, the company’s average return on equity was -312.06%, a decrease of 170.77 percentage points compared to the previous year. Significant changes in liabilities showed an increase in accounts payable by 55.03%, while long-term borrowings decreased by 24.6%. Other non-current liabilities increased by 58.67%, and lease liabilities decreased by 10.38% by the end of 2025.
Behind the net loss in 2025 was a reduction in total employees from 45,600 to 35,000, a decrease of over 23%. The number of product and software development personnel dropped significantly by 40%, with reductions also seen in the user experience and administrative departments.
With the downsizing of personnel, costs decreased for NIO. The company’s research and development expenses in 2025 were 10.6 billion yuan, an 18.7% decrease from the previous year. The CEO, Li Bin, acknowledged the shift towards meticulous cost management and efficiency gains within the organization.
However, analysts express concerns that the sharp decline in R&D investment in the automotive industry typically impacts product competitiveness 18 to 24 months later. NIO, known for its ‘full-stack self-development,’ significantly reduced its R&D team. If its sub-brands like Neucar and Firefly fail to deliver timely cost-effective solutions, their current ‘profit through cost-cutting’ strategy may not be sustainable.
Despite these challenges, NIO reported a profit in the fourth quarter of 2025, with operating profit of 1.25 billion yuan and a net profit of 283 million yuan, marking the first profitable quarter since the company went public. The flagship model ES8 played a crucial role in driving profits with high margins, leading to a new high comprehensive gross margin of 17.5% since 2022.
However, the quarterly profit cannot mask the annual losses. As reported by Securities Times, NIO’s accumulated losses have exceeded one trillion yuan since mass delivery began in 2018.
Of particular concern is the liquidity risk hidden in NIO’s balance sheet. By the end of 2025, the company’s total debt exceeded one hundred billion, reaching 111.7 billion yuan with an asset-liability ratio of 89.8%. With a current ratio of only 0.98 and a quick ratio of 0.87, the company faces a liquidity gap of approximately 2 billion yuan. Typically, a current ratio below 1 indicates pressure on short-term debt repayment abilities.