* NIO reports first-ever quarterly net profit, aims for

2026 break-even

* Memory chip shortage raises costs, but NIO won't

increase prices

* European market challenges include declining EV

incentives, rising electricity costs

(Updates with stock performance, comments on memory chip

shortage in paragraphs 3-8)

SHANGHAI, March 11 (Reuters) - Chinese electric vehicle

maker NIO aims to sell thousands of its cars overseas

this year, as part of a plan to expand abroad over the next two

to three years, President Qin Lihong said on Wednesday.

The comments came after NIO reported its first-ever

quarterly net profit and forecast it will break even in the full

year of 2026.

NIO shares ended 14% higher on Wednesday.

Chief Executive William Li said costs had risen due in part

to a memory chip shortage, estimating that total costs would

rise by up to 10,000 yuan ($1,455.69) per vehicle.

But Li said the company did not plan to raise prices as it

could absorb cost pressures.

"Memory chip is indeed a problem that in worst cases can

lead to production suspension," Li said.

"Overall, together with raw materials, premium EVs could see

6,000 yuan to 10,000 yuan increases in costs per car," he added.

Analysts have warned of a memory chip crunch in the

automotive sector, especially for smart, high-end EVs, which

could worsen this year and potentially squeeze the margins of

Chinese carmakers.

While it expects the domestic passenger car market to

experience a fall in overall sales, NIO wants to build a good

reputation among overseas users, with top executives personally

reviewing consumer complaints, Qin said.

However, the European market poses growing challenges as

government EV incentives decline and electricity costs increase,

according to the 11-year-old Chinese automaker.

Chinese automakers are looking to get tariff waivers from

the European Commission in exchange for an agreed minimum price

and a sales quota.

The European Union introduced tariffs against China-based EV

makers in 2024, but recently launched a scheme where carmakers

can negotiate tariff exemptions for individual electric models

imported from China.

($1 = 6.8696 Chinese yuan renminbi)