NIO reported its first-ever net profit in the final quarter of 2025, driven by record sales and strong margins, joining the small but growing ranks of profitable electric-vehicle makers in the world’s largest auto market.

The company is considered one of the top three emerging EV brands in China, alongside XPeng and Li Auto. The automaker had some difficulty scaling up sales in the first half of last year, but demand for its flagship premium SUV, the all-new ES8, has been strong since its third-quarter launch, and contributions from its mainstream ONVO and affordable Firefly brands have grown.

Trump Sons Back New Drone Company Targeting Pentagon Sales

TSA Security Lines Are Dragging On for Hours, and Airports Say to Brace for More

Living on the Outskirts of Atlanta Is About to Be Pricier Than Living in It

Sturm Ruger Accuses Beretta of Attempting to Gain Control of Company

Anthropic’s Standoff With the Pentagon Shakes Up AI Talent Race

The earnings beat came as NIO, known for its battery-swapping technology, posted a 72% jump in fourth-quarter vehicle deliveries, building on the previous quarter’s momentum after months of subdued sales. The EV maker delivered a record 48,135 units in December, bringing the quarterly total to 124,807 vehicles, a new high.

“The NIO All-New ES8 maintained strong delivery momentum, setting a new monthly delivery record among vehicles priced above 400,000 yuan,” Chief Executive William Bin Li said Tuesday. He also touted the ONVO L90’s performance, which was the best-selling large battery-electric SUV last year, and the Firefly’s leading position in the premium small-car segment.

The final quarter of the year is typically the strongest period for China’s EV market as automakers push to meet annual delivery targets. Rush buying by consumers to beat changes to government incentives for EV purchases this year also helped support sales toward the end of 2025.

The Shanghai-based company said net profit was 122.4 million yuan for the three months ended December, equivalent to $17.7 million, compared with net loss of 7.13 billion yuan a year earlier. Revenue rose 76% to 34.65 billion yuan.

Analysts had expected a net loss of 292.2 million yuan on revenue of 30.31 billion yuan, according to a Visible Alpha poll.

For the full year, NIO narrowed its net loss to 15.57 billion yuan as revenue climbed 33% to 87.49 billion yuan.

NIO’s gross margin rose to 13.6% last year from 9.9% in 2024. Its fourth-quarter gross margin improved to 17.5% from 11.7%. The company said a more favorable product mix supported the stronger margins in the final quarter of 2025.

The company has sought to set itself apart in China’s crowded EV space by focusing on advancing battery technology. It has championed battery swapping as a speedy alternative to charging, despite such stations requiring greater infrastructure investment, and offers battery-rental services to reduce the upfront cost of buying a car. NIO in February said it completed 100 million battery swaps, calling the achievement a validation of the market and a new chapter for the company.

Yet questions about the sustainability of its business model have surfaced, after rival BYD released a new EV battery that can be fully charged in nine minutes using its new flash charging stations.

Faced with a saturated domestic industry, NIO has continued its push into overseas markets to boost sales and margins. It plans to launch its EVs in Australia and New Zealand, likely in the second half of 2026, and is entering the Thai market in March with its Firefly-branded vehicles, according to Chris Chen, head of global business development at NIO, in a recent interview.

For the first quarter, the EV maker expects vehicle deliveries to nearly double to between 80,000 units and 83,000 units, and revenue of 24.48 billion yuan to 25.18 billion yuan, more than doubling from the previous year.

NIO’s American depositary receipts were recently 7.3% higher in premarket trading.

Write to Jiahui Huang at Jiahui.Huang@wsj.com

Why Iranian Regime Change Would Transform Global Energy Markets

The 24 Hours When Oil Markets Went Wild

Tokenized Stocks Are Coming to a Market Near You: Five Things to Know

Anthropic Sues U.S. Defense Department, Pete Hegseth for Targeting the Company

Flying-Taxi Maker Archer Sues Joby, Accusing Rival of Playing Down Reliance on China