[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  jan dekkers [@jan_dekkers](/creator/twitter/jan_dekkers) on x 1165 followers Created: 2025-07-20 19:23:50 UTC $NIO What Would Net Profit Look Like in Q4 With a $600M CapEx Spend? Spoiler alert: $100M net profit for Q4 If NIO delivers XXXXXXX vehicles in Q4 at an average selling price of $XXXXXX with an XX% gross margin, the gross profit would be approximately $XXX million. But gross profit is just the beginning. What happens when capital expenses come into play—particularly a $XXX million investment in factories, infrastructure, or R&D? Let’s explore two scenarios. Scenario 1: CapEx Spread Over X Years Capital expenditures are typically amortized over several years. If NIO spreads its $XXX million investment evenly over X years, only $XXX million would hit the Q4 income statement. Combined with reasonable estimates for R&D and administrative costs, here’s what the numbers might look like: Gross Profit: $XXX million R&D Expense: –$200 million Sales, General & Admin (SG&A): –$150 million CapEx Amortization (1 year): –$120 million Operating Income: $XXX million Interest and Other Costs: –$30 million Pre-Tax Income: $XXX million Tax (20% est.): –$26 million Estimated Net Profit: ~$104 million In this scenario, NIO would post a profitable quarter, despite investing heavily in its long-term growth. Scenario 2: Full CapEx Write-off in Q4 If NIO decided to expense the entire $XXX million in Q4—a more aggressive accounting approach—the result would look very different: Gross Profit: $XXX million R&D + SG&A: –$350 million CapEx Write-off: –$600 million Operating Loss: –$320 million Estimated Net Loss: ~$350 to $XXX million This paints a picture of a company taking a major investment hit all at once, which would result in a large accounting loss—despite strong gross performance. It's not uncommon for high-growth tech and automotive firms to show net losses while scaling aggressively. NIO's Q4 performance could vary significantly depending on how it handles CapEx. By spreading the investment over five years, the company could report a solid net profit of around $XXX million. On the other hand, a full write-off would show a significant net loss—but one driven by strategic investment, not operational weakness. This highlights the importance of reading between the lines when assessing earnings. A quarterly loss isn't always a sign of trouble—it may simply reflect a long-term growth strategy. NIO’s Aggressive Expense Recognition Strategy: A Long-Term Advantage? Unlike many of its competitors, NIO has been writing off most of its expenses in the same quarter they occur—including R&D, infrastructure, and other capital-intensive items. This conservative accounting approach may make the company’s short-term financials look worse on paper, but it tells a deeper story. By front-loading these expenses, NIO absorbs the financial pain early. The result? Lower carry-forward liabilities, fewer deferred costs, and a cleaner balance sheet going into future quarters. As we approach Q4, this strategy could set NIO apart. While rivals may still be amortizing past spending, NIO moves forward with fewer legacy losses, potentially giving it a sharper path to profitability. Short-term optics might not favor them—but the long game just might.  XXXXX engagements  **Related Topics** [100m](/topic/100m) [investment](/topic/investment) [nio](/topic/nio) [$100m](/topic/$100m) [$600m](/topic/$600m) [$nio](/topic/$nio) [Post Link](https://x.com/jan_dekkers/status/1947014606335209797)
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jan dekkers @jan_dekkers on x 1165 followers
Created: 2025-07-20 19:23:50 UTC
$NIO What Would Net Profit Look Like in Q4 With a $600M CapEx Spend? Spoiler alert: $100M net profit for Q4
If NIO delivers XXXXXXX vehicles in Q4 at an average selling price of $XXXXXX with an XX% gross margin, the gross profit would be approximately $XXX million.
But gross profit is just the beginning. What happens when capital expenses come into play—particularly a $XXX million investment in factories, infrastructure, or R&D?
Let’s explore two scenarios.
Scenario 1: CapEx Spread Over X Years
Capital expenditures are typically amortized over several years. If NIO spreads its $XXX million investment evenly over X years, only $XXX million would hit the Q4 income statement. Combined with reasonable estimates for R&D and administrative costs, here’s what the numbers might look like:
Gross Profit: $XXX million
R&D Expense: –$200 million
Sales, General & Admin (SG&A): –$150 million
CapEx Amortization (1 year): –$120 million
Operating Income: $XXX million
Interest and Other Costs: –$30 million
Pre-Tax Income: $XXX million
Tax (20% est.): –$26 million
Estimated Net Profit: ~$104 million
In this scenario, NIO would post a profitable quarter, despite investing heavily in its long-term growth.
Scenario 2: Full CapEx Write-off in Q4
If NIO decided to expense the entire $XXX million in Q4—a more aggressive accounting approach—the result would look very different:
Gross Profit: $XXX million
R&D + SG&A: –$350 million
CapEx Write-off: –$600 million
Operating Loss: –$320 million
Estimated Net Loss: ~$350 to $XXX million
This paints a picture of a company taking a major investment hit all at once, which would result in a large accounting loss—despite strong gross performance. It's not uncommon for high-growth tech and automotive firms to show net losses while scaling aggressively.
NIO's Q4 performance could vary significantly depending on how it handles CapEx. By spreading the investment over five years, the company could report a solid net profit of around $XXX million. On the other hand, a full write-off would show a significant net loss—but one driven by strategic investment, not operational weakness.
This highlights the importance of reading between the lines when assessing earnings. A quarterly loss isn't always a sign of trouble—it may simply reflect a long-term growth strategy.
NIO’s Aggressive Expense Recognition Strategy: A Long-Term Advantage?
Unlike many of its competitors, NIO has been writing off most of its expenses in the same quarter they occur—including R&D, infrastructure, and other capital-intensive items. This conservative accounting approach may make the company’s short-term financials look worse on paper, but it tells a deeper story.
By front-loading these expenses, NIO absorbs the financial pain early. The result? Lower carry-forward liabilities, fewer deferred costs, and a cleaner balance sheet going into future quarters.
As we approach Q4, this strategy could set NIO apart. While rivals may still be amortizing past spending, NIO moves forward with fewer legacy losses, potentially giving it a sharper path to profitability.
Short-term optics might not favor them—but the long game just might.
XXXXX engagements
