①Nio achieved revenue of 21.79 billion yuan in the third quarter, a year-on-year increase of 16.7% and a quarter-on-quarter increase of 14.7%, setting a new historical high. ②XPeng Motors achieved revenue of 20.38 billion yuan in the third quarter, a year-on-year increase of 101.8% and a quarter-on-quarter increase of 11.5%. ③Li Auto’s gross margin in the third quarter dropped to 16.3%, with the Li MEGA recall incident being the key factor affecting this decline in performance.
Cailian Press, November 27 (reported by Xu Hao) — As of the evening of November 26, the three emerging EV makers, “Nio, XPeng, and Li Auto,” successively disclosed their third-quarter financial reports.
The financial report shows that $NIO-SW (09866.HK)$ driven by a multi-brand strategy, performance has significantly improved; $XPENG-W (09868.HK)$ while maintaining growth momentum, it continues to aggressively advance multi-faceted deployments in the AI field. Impacted by the MEGA recall incident and the dual-track strategy of range extension and pure electric vehicles, $LI AUTO-W (02015.HK)$ remains in a transitional pain period, with performance showing a decline.
Facing policy adjustments and intensified market competition in 2026, the three leading new ventures have expressed relatively optimistic expectations. “By 2026, domestic new energy vehicle penetration may reach 55%-60%, and the penetration rate of premium new energy vehicles will exceed 60%,” said Ma Donghui, President of Li Auto.
Nio demonstrates positive performance; Li Auto records single-quarter loss after 11 quarters.
On the path to achieving profitability goals for the fourth quarter, Nio achieved revenue of 21.79 billion yuan in the third quarter, a year-on-year increase of 16.7% and a quarter-on-quarter increase of 14.7%, setting a new historical high; net losses narrowed to 3.48 billion yuan, down 31.2% from the same period in 2024 and 30.3% from the second quarter of 2025.
The third-quarter report shows that Nio’s comprehensive gross margin rose to 13.9%, the highest in nearly three years; the vehicle gross margin reached 14.7%, also setting a record high over the past three years, increasing by 4.4 percentage points from 10.3% in the previous quarter.
“The improvement in gross profit in the third quarter was mainly driven by cost reductions in the supply chain brought about by increased sales volumes and the launch of the high-margin model L90 under the Le Dao brand.” Nio’s CFO Qu Yu provided a breakdown – by model, the gross margin of the all-new ES8 is 20%, the gross margin of the 5566 model ranges between 15% and 20%, and the gross margin of the Le Dao L90 is between 15% and 20%.
XPeng Motors, which disclosed its third-quarter report ahead of others and is also striving toward profitability goals in the fourth quarter, achieved revenue of 20.38 billion yuan in the third quarter, a year-on-year increase of 101.8% and a quarter-on-quarter increase of 11.5%; net losses narrowed to 380 million yuan, compared to net losses of 1.81 billion yuan in the same period last year and 480 million yuan in the second quarter of 2025.
The improvement in gross margin was also a primary reason for the narrowing of XPeng’s net losses – its comprehensive gross margin exceeded 20% for the first time in the third quarter, reaching 20.1%, up 4.8 percentage points year-on-year and 2.8 percentage points quarter-on-quarter; the vehicle gross margin was 13.1%, up 4.5 percentage points year-on-year but down 1.2 percentage points quarter-on-quarter; service and other margins were 74.6%, compared to 60.1% in the same period in 2024 and 53.6% in the second quarter of 2025.
After 11 consecutive quarters of profitability, Li Auto reported a loss in the third quarter of 2025. In terms of deliveries, the total number of vehicles delivered by Li Auto in the third quarter was 93,211 units, representing a year-on-year decrease of 39.0%. Revenue for the third quarter amounted to RMB 27.365 billion, marking a year-on-year decline of 36.2%, while net profit turned into a net loss of RMB 624 million from RMB 2.821 billion in the same period last year.
The third-quarter report shows that Li Auto's gross margin fell to 16.3%, with vehicle gross margin dropping to 15.5%, a significant decrease from 20.9% in the same period last year. Notably, the recall of the Li MEGA became a key factor affecting this downturn in performance.
"In accordance with accounting standards and based on the current situation, we have treated the recall of the 2024 MEGA as a subsequent event and provisioned approximately RMB 1.1 billion in warranty costs for the MEGA recall in the third quarter based on estimated amounts," said Li Auto CFO Tiejun Li at the earnings conference on the evening of November 26.
Nio pushes forward with 'Five Major Models,' intensifying competition in the range-extended market
Despite a noticeable improvement in performance, achieving profitability remains an urgent priority for Nio, which still records the largest losses among the three automakers.
"The gross margin for vehicle sales reached 14.7% in the third quarter, and is expected to further increase to 18% in the fourth quarter. We are confident in achieving profitability in the fourth quarter," reiterated Bin Li, Chairman of Nio, during the third-quarter earnings call, while setting a target of achieving full-year profitability by 2026.
As for the path to profitability, Nio will continue to focus on the premium electric vehicle market—planning to launch two new models in the second quarter and one in the third quarter next year, with expectations of achieving monthly sales of 50,000 units. Additionally, Nio will rely on high-margin models for increased sales. "Including three new models, there will be a total of five large models on sale next year." According to Bin Li, large models will maintain a high share of overall company sales, presenting significant opportunities to boost comprehensive gross margins. "Combined with continuous cost reductions in the supply chain and ongoing optimization of sales, R&D, and administrative expenses, the company’s comprehensive gross margin is projected to reach 20% by 2026."
Besides outlining strategic priorities, Bin Li also identified “three key growth drivers” during the Q3 earnings communication session on November 26: technological system capabilities, a three-brand strategy, and operational efficiency improvements. Regarding the three-brand strategy, Bin Li cited the ES8 model from the NIO brand, which focuses on the premium EV segment above RMB 300,000, noting its "relatively high unit price and gross margin," contributing "tens of billions in additional gross profits" in the third quarter. Bin Li also revealed that Nio ES8 currently has a substantial order backlog, sufficient to offset potential low performance in the first quarter of next year.
Compared to Nio's focus on short-term market gains, XPeng Motors and Li Auto are set to intensify competition in both the pure electric and range-extended markets. XPeng plans to launch three super range-extended products in the first quarter of 2026 and four new “dual-energy” models later that year, including its first product targeting a key niche market, aiming to achieve breakthroughs in previously untapped categories.
"The seven dual-energy models with super range-extender configurations scheduled for release next year will significantly expand the addressable market for our models, bringing substantial sales growth potential," said He Xiaopeng, Chairman of XPeng Motors.
Li Auto's Donghui Ma proposed an overall strategic goal during the earnings call to 'regain the leading position in range-extended products by 2026.' The Li Auto L series will undergo a major redesign by 2026. In the battery electric vehicle sector, to address production ramp-up challenges, the supply of batteries for the Li Auto i6 will adopt a 'dual supplier' model starting in November. By early next year, the monthly production capacity of the Li Auto i6 is expected to steadily increase to 20,000 units. Additionally, the company’s self-developed 5C battery will enter mass production next year.
Bin Li Sets Annual Profit Target; He Xiaopeng and Li Xiang Envision 'Decade-Long Vision'
Unlike Bin Li's clear short-term full-year profitability target and the corresponding 'focus on core automobile business' strategy, XPeng Motors and Li Auto, both celebrating their 'tenth anniversary,' have outlined more long-term corporate visions.
"The company's new ten-year vision is to make XPeng Motors a global leader in embodied intelligence," said He Xiaopeng.
At XPeng Motors' AI Technology Day on November 5, the company disclosed its latest R&D achievements in areas such as autonomous driving, Robotaxi, robotics, and low-altitude flight, providing clear timelines for mass production. "Continuous improvement in the company's operations has strengthened our commitment to investing in physical AI R&D, accelerating the large-scale production of the second-generation VLA model, Robotaxi, and humanoid robots by 2026," emphasized He Xiaopeng during the Q3 earnings call.
During the Q3 earnings call, Li Auto Chairman Li Xiang delivered an extensive reflection on the organization, products, and technology of Li Auto over the past three years, stating, "Starting from this fourth quarter, we are firmly returning to a venture management model to meet the challenges posed by a new era and new technologies."
According to Li Xiang’s vision, over the next decade, Li Auto will 'become the best-performing company in the field of embodied intelligence.' To achieve this vision, 'the most important task is to build an AI system distinct from language-based intelligence.'
"The AI inference chip serves as the computational core of this system. Controllers equipped with our self-developed chips have begun large-scale system testing and are expected to be officially deployed next year. Paired with our foundational large models, compilers, and software systems, we anticipate that the performance-to-cost ratio of M100 in the next-generation VLA architecture-based autonomous driving system will be more than three times that of current high-end chips," said Xie Yan, CTO of Li Auto, during the Q3 earnings presentation.
Li Xiang believes that when the AI system, centered around the M100 chip, begins delivery in products next year, the true value and user experience of Li Auto vehicles will transform. Specifically, this change will shift cars from passive usage to true automation and proactivity in serving users.
In addition to what Li Xiang referred to as the 'automotive robot' itself, Li Auto will also release AI accessories, including smart glasses, to achieve broader coverage among Li Auto users. On November 27, Li Auto announced on its official social media that it would launch the Livis AI glasses on December 3.
Editor/Liam
