Nio's Second-Quarter Loss Expands due to China's Economic Deceleration
Chinese electric vehicle manufacturer Nio faced a considerable setback in the second quarter, reporting a loss of $835.1 million. This figure is more than double its loss from the same period last year, attributable to a decline in deliveries of its premium electric vehicles (EVs). This drop in deliveries is a result of the company's transition to an updated vehicle platform and the broader economic deceleration occurring in China.
Revenue: 8.77 billion yuan ($1.21 billion), falling short of the expected 9.25 billion yuan.
Adjusted loss per share: 3.28 yuan (45 cents), exceeding the anticipated 2.45 yuan.
In response to this report, Nio's shares experienced a 5% decline during midday trading.
Nio's adjusted financial metrics exclude expenses related to share-based compensation. On a Generally Accepted Accounting Principles (GAAP) basis, the company posted a net loss of $835.1 million, corresponding to 51 cents per share.
In terms of Chinese yuan, Nio reported a net loss of 6.06 billion, equivalent to 3.70 yuan per share. In comparison, the company reported a net loss of 2.76 billion yuan, or 1.68 yuan per share, with revenue totaling 10.29 billion yuan during the same period last year.
Regarding vehicle gross margin, Nio achieved 6.2% in the second quarter, a drop from 16.7% a year earlier but an increase from 5.1% in the first quarter of 2023.
Nio unveiled a revamped version of its primary model, the ES6 crossover, on the new "NT2.0" platform in May. In June, the company introduced a station wagon iteration of its ET5 sedan. The updated lineup has already demonstrated improved performance, with a total of 20,462 vehicles delivered in July alone.
During the second quarter, Nio managed to deliver only 23,520 vehicles, as it worked to sell off its outgoing models with significant discounts.
CEO William Bin Li expressed in a statement that the strong July results positioned Nio at the forefront of China's EV sales charts for vehicles priced above 300,000 yuan (approximately $41,000) for the month. He added, "We anticipate robust growth in vehicle deliveries throughout the latter half of 2023."
Nio also bolstered its financial standing in July by finalizing a $738.5 million equity investment from a fund overseen by the government of Abu Dhabi. As of the end of June, the company possessed $4.3 billion in cash and equivalents.
For the upcoming third quarter, Nio projects a significant increase in deliveries, estimating between 55,000 and 57,000 vehicles. This forecast surpasses the 31,607 EVs delivered during the third quarter of 2022. The company anticipates revenue for the period to range from $2.61 billion to $2.69 billion, marking a notable rise from the $1.83 billion recorded in the same period of the previous year.