(Yicai) Aug. 24 -- Profitability should be the ultimate metric for judging the value of tech-driven companies, according to the founder of Chinese new energy vehicle startup Nio.

Li Bin made this remark at a science and innovation forum held in Shanghai on Aug. 22. Nio turned profitable for the first time in the fourth quarter of last year, and achieved a nearly 70 percent growth in deliveries in the first half of this year from a year earlier, when overall auto sales in China fell about 20 percent.

Heavy investments in the battery-swapping business kept Nio in the red for many years, but the situation started to shift in the fourth quarter of last year. The firm posted an adjusted net profit of CNY43.5 million (USD6.5 million) in the first quarter of this year, marking a second profitable quarter in a row on a non-GAAP basis. It has yet to release its second-quarter earnings.

The competition in the NEV industry is entering the most brutal final phase, Li believes. “Over the next three to five years, the champions of the automotive sector will largely be settled, so the next one to two years will be a critical period for players to keep up or get left behind.”

Industrial competition will also go through different stages, such as the acceleration in battery electric vehicle utilization, a shift from brand chaos to clarification, and a transition from single-advantage to system-level competition, Li said. “Relying on one single strong edge to win industry competition is no longer possible,” he added.

“When talking about longtermism, we refer to the ultimate viability of the business model,” Li noted. “Within the automotive value chain, vehicle sales are only one segment, as the returns an enterprise can capture across the full value chain are larger than many expect.”

Li believes that carmakers’ most vital asset is their relationship with users. Nio’s biggest milestone last year was not profitability, but the fact that its services and community revenue exceeded CNY10 billion (USD1.5 billion) for the first time ever in the fourth quarter and achieved full-year profitability.

Nio’s services and community revenue covers after-sales services, energy services such as battery swapping, charging, and upgrading, Nio Life merchandise sales, used-car operations, auto insurance and financing, and technology exports. In 2025, this revenue segment expanded 41 percent to CNY10.6 billion from the year before.

The above achievement stems from Nio’s adherence to longtermism, Li said. “We sometimes face temptations and setbacks,” he noted. “Investors and employees will exert pressure, and we may even impose pressure on ourselves, and risk losing our determination.”

Editors: Tang Shihua, Futura Costaglione