Q3 revenue declined, losses persist! Nio faces production capacity crisis again?
Recently, the third-quarter earnings reports of new energy vehicle makers XPeng and Nio have been released one after another, attracting widespread market attention.
After the earnings announcement, on November 20 (Eastern Time), $XPeng(XPEV.US) and $NIO(NIO.US) saw slight increases, closing up 0.96% and 0.43%, respectively.
The next day (November 21), the performance of Hong Kong stocks was disappointing. As of press time, $XPENG-W(09868.HK)fell 5.06%, marking two consecutive trading days of decline; $NIO-SW(09866.HK) saw its stock price rise against the market trend in early trading but later weakened. As of press time, the stock was down 1.1% at HKD 36.
Among the third-quarter earnings reports of new energy vehicle makers, Nio's performance was lackluster.
Nio: Third-Quarter Losses Further Expanded
In the third quarter, Nio's revenue was RMB 18.673 billion, falling short of market expectations, down 2.1% year-on-year but up 7% quarter-on-quarter. Vehicle sales amounted to RMB 16.698 billion, down 4.1% year-on-year but up 6.5% quarter-on-quarter. This was mainly due to changes in product mix leading to a decline in average selling prices, partially offset by increased deliveries.
In the third quarter, Nio's vehicle deliveries reached 61,855 units, a record high, up 11.6% year-on-year and 7.8% quarter-on-quarter. Among these, deliveries of Nio's premium smart electric vehicles totaled 61,023 units, while the ONVO brand delivered 832 units.
In terms of gross margin, Nio's gross margin in the third quarter increased by 2.7 percentage points year-on-year and 1 percentage point quarter-on-quarter to 10.7%. This was mainly driven by growth in vehicle gross margin and improvements in the gross margins of parts, accessories, and after-sales services.
During the reporting period, through continuous cost optimization, Nio's vehicle gross margin rose to 13.1%, up 2.1 percentage points year-on-year and 0.9 percentage points quarter-on-quarter.
It is worth noting that Nio's losses continue to widen. During the reporting period, its net loss was RMB 5.06 billion, up 11% year-on-year and 0.3% quarter-on-quarter. For comparison, Nio's single-quarter loss in Q3 was 2.8 times that of XPeng's Q3 loss and 7.33 times that of Leapmotor's Q3 loss. Meanwhile, Li Auto reported a net profit of RMB 2.821 billion, marking multiple consecutive quarters of profitability.
However, looking ahead to the fourth quarter, Nio provided an optimistic outlook, expecting vehicle deliveries in Q4 2024 to reach 72,000 to 75,000 units, up 43.9%-49.9% year-on-year. Total revenue is projected to be between RMB 19.676 billion and RMB 20.383 billion, up 15.0%-19.2% year-on-year.
For 2025, Nio's Chairman and CEO William Li set a delivery growth target of 100% year-on-year, aiming for annual sales of around 450,000 units. Li stated that with sales doubling in 2025, Nio's overall operations will continue to achieve positive growth, and losses are expected to narrow in 2025, with the goal of achieving profitability in 2026.
So, where does William Li's confidence come from?
Accelerating the Multi-Brand Strategy
First, Nio's deliveries continue to rise. Since May, Nio has maintained relatively stable delivery levels, delivering 20,976 new vehicles in October, marking six consecutive months of exceeding 20,000 units. From January to October, Nio delivered a total of 170,257 new vehicles, up 35.05% year-on-year.
Second, Nio is gradually entering a multi-brand development phase, planning three automotive brands: Nio, ONVO, and Firefly, to meet the needs of different users.
Among these, the ONVO brand's first model, the L60, launched in September, has been repeatedly mentioned by Nio as experiencing "explosive orders."
However, it is worth noting that ONVO has also faced market criticism due to slow production ramp-up, leading to delayed deliveries. As of November 14, ONVO's total deliveries were just over 7,000 units. Nio is once again facing production challenges, with multiple institutions stating that the top priority is to get vehicles manufactured on time.
Additionally, the third brand, Firefly (priced at RMB 100,000-200,000), is highly anticipated. The brand plans to launch its first model at NIO Day 2024 on December 21, with deliveries starting in the first half of 2025.
Nio revealed that Firefly will leverage the company's experience in the premium pure electric vehicle market to usher in a new era of smart electric vehicles for global premium compact cars, focusing on design, safety, space, intelligence, and charging efficiency.
Nio's CFO Qu Yu stated that starting in 2025, Nio's three brands will enter a strong product cycle, driving sales into a faster growth phase.
Currently, competition in China's automotive industry is intensifying, with innovation, products, and pricing all reaching extreme levels. Moving forward, the pressure on Nio to break through is palpable.
Author: Bottle
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