Nio (NIO, Financials) is entering what founder and CEO William Li called a harvest period after years of heavy investment, saying the Chinese electric carmaker is on track to achieve profitability in the fourth quarter.
Li said the company’s years of spending on research, infrastructure, and product development are beginning to pay off. He pointed to upcoming models including the all-new ES8 launching Aug. 21 and the recently released L90 as evidence of a long product cycle now delivering results.
The company has targeted monthly deliveries of 25,000 units for the Nio brand and an additional 25,000 for its Onvo sub-brand. Larger models such as the ES8 and ES9 are expected to carry higher margins than sedans.
Nio is also doubling down on infrastructure, continuing its build-out of a battery-swapping network, though it remains behind schedule on its 2025 goal of up to 2,000 stations. Li said regional networks in Guangdong, Jiangsu, Zhejiang and Shanghai will support sales growth.
The EV maker has also pledged tighter cost discipline, aiming to limit quarterly R&D spending to 2 billion2.5 billion yuan ($278 million$348 million), down 20% to 25% year over year.
BlackRock (BLK, Financials) increased its holdings in Nio for the second straight quarter, adding more than 400,000 shares in the three months ended June, according to a regulatory filing.
This article first appeared on GuruFocus.