Nio’s Profit: Mostly Harmless

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Shares of the Chinese electric vehicle manufacturer, Nio (NIO +7.34%), experienced a rather noticeable upward trajectory on Friday. This wasn’t due to a sudden breakthrough in faster-than-light travel (though one always hopes), but a preliminary announcement suggesting they might, just might, be reporting an adjusted operating profit for the fourth quarter. A profit. Imagine that. It’s a concept that’s been largely theoretical for some time, like a perfectly rational tax code.

As of 1:00 p.m. ET, Nio’s American depositary shares were up around 7.3% from Thursday’s closing price. Which, in the grand scheme of cosmic events, is neither particularly significant nor entirely irrelevant. It’s somewhere in between, like the number of grains of sand on a particularly small beach.

Nio Issued the Good Kind of “Profit Alert”

Nio, in a statement that was remarkably free of exclamation marks (a promising sign), indicated an expected adjusted operating profit somewhere between 700 million Chinese yuan (approximately $100 million – currency exchange rates being the constantly shifting sands of financial reality) and 1.2 billion yuan (roughly $172 million). This, should it materialize, would represent the first time the company has managed to achieve a quarterly operating profit on that basis. It’s a milestone, you see, akin to a penguin successfully negotiating a trade agreement with a particularly stubborn walrus.

Now, “adjusted” is a word that should always be approached with a degree of caution. It’s a bit like calling a slightly damaged spaceship “pre-loved.” It implies a certain amount of…creative accounting. In Nio’s case, the adjustment involves excluding the costs of share-based employee compensation. This isn’t necessarily nefarious, mind you. It’s merely a way of presenting a clearer picture of the underlying business performance, or at least, a picture that’s a bit less cluttered with the complexities of modern corporate remuneration. (It’s also, incidentally, a tactic used by approximately 98.7% of publicly traded companies. The remaining 1.3% are either lying or have a truly baffling accounting system.)

Previously, in the fourth quarter of 2024, Nio reported an adjusted operating loss of 5.54 billion yuan (about $799 million). A substantial sum, admittedly, but one that now appears to be receding into the mists of financial history. Or at least, slightly less present in the current quarterly reports.

Nio’s Deliveries Appear to Have Crossed its Break-Even Point

Nio didn’t precisely detail how they managed this feat of financial alchemy. But they did reveal that they delivered 124,807 electric vehicles in the quarter, a remarkable 72% increase from the same period in 2024. It’s reasonable to assume that this surge in deliveries was enough to finally push the company past its break-even point – a significant achievement for a still-young automaker. (One imagines a small, celebratory parade involving miniature electric vehicles and slightly bewildered accountants.)

An official date for the fourth-quarter earnings report hasn’t been announced yet, but it’s likely to arrive in early March. Until then, we can only speculate on the finer details, and ponder the sheer improbability of it all. After all, the universe is a remarkably strange place, and a profitable electric car company is, in its own way, a minor miracle.

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2026-02-06 21:25