Nio Inc. Reports Second-Quarter Results

Shares of Nio Inc. slipped on Tuesday following the release of their second-quarter results. While the results fell short of expectations, the company provided an optimistic revenue outlook for the current quarter.

Stock Performance

Nio’s stock (NIO) recorded a 0.3% decline in premarket trading, extending a trend of one-day post-earnings losses that has occurred after 12 out of the past 15 quarterly reports.

Financial Results

For the quarter ending June 30, Nio reported a net loss of RMB5.79 billion ($798.9 million), or RMB3.70 per American depositary share (ADS). This marked a widening of losses compared to the same period last year, when the net loss was RMB2.26 billion, or RMB1.68 per ADS.

Adjusted per-ADS losses (excluding non-recurring items) came in at RMB3.28, missing the FactSet consensus of RMB2.96.

Total revenue for the quarter declined by 14.8% to RMB8.77 billion ($1.21 billion), falling short of the FactSet consensus of RMB9.16 billion. Vehicle sales totaled RMB7.19 billion, a decrease of 22.1% from the previous quarter and 24.9% from last year.

While revenue contracted, cost of sales decreased by a smaller margin (3.0%), resulting in a contraction of gross margin from 13% to 1.0%.

Deliveries and Outlook

Nio delivered a total of 23,520 vehicles in the second quarter, representing a 6.1% decline. However, for the month of July, the company delivered 20,462 electric vehicles (EVs), marking a significant increase of 103.6% compared to the previous year.

Chief Executive William Bin Li attributed the performance to a product transition based on the NT2.0 Platform, along with the expansion of their power network and strengthening of sales capabilities. He expressed confidence in a solid growth in vehicle deliveries in the second half of 2023.

Looking ahead, Nio anticipates total revenue for the third quarter to be between RMB18.90 billion and RMB19.52 billion, surpassing last year’s revenue of RMB13.00 billion and exceeding the current FactSet consensus of RMB18.03 billion. In terms of deliveries, the company projects between 55,000 and 57,000 EVs, compared to 31,607 EVs delivered in the third quarter of the previous year.

Stock Performance Trends

Over the past three months leading up to Monday, Nio’s stock has experienced a notable increase of 43.1%. In comparison, the iShares MSCI China exchange-traded fund (MCHI) slipped 0.1%, while the S&P 500 index (SPX) gained 5.4%.