Nio Stocks Pare Early Losses of 7% Despite Q3 Revenue and Net Loss Miss

TMTPOST -- The American depositary receipts (ADRs) of Nio Inc. finished more than 0.4% higher on Wednesday, paring losses as much as 6.9% at morning trade. Shares shrugged off worse-than-expected losses for the third quarter the Chinese electric vehicle (EV) manufacturer posted earlier that day.

Credit：Nio

Nio missed both top and bottom line for the quarter ended September 30 2024. Total revenue declined 2.1% year-over-year (YoY) to RMB18.67 billion (US$2.58 billion), whereas analysts estimated revenue of RMB19.17 billion. On non GAAP basis, adusted net loss exccluding share-based compensation expenses was RMB4.41 billion, compared with Wall Street projected loss of RMB4.25 billion. The net loss widened 11.6% from a year ago. Non GAAP adjusted loss from operations widened 8.3% YoY to RMB4.59 billion, versus projected loss of RMB4.64 billion.

Nio executives highlighted record-breaking delivery of 61,855 EVs the company posted for the third quarter. The delivery represented a 11.6% YoY increase and consists of 61,023 vehicles from the company’s premium smart electric vehicle brand NIO, and 832 vehicles from its family-oriented smart electric vehicle brand ONVO.

Nio CEO Li Bin said the total delivery volume for the fourth quarter is expected to reach a new record. He noted deliveries of L60, the first model under the ONVO brand, have commenced on September 28, with production capacity set to rapidly expand in the next few months, and Nio’s executive flagship, the ET9, is in the final preparation stage of mass production.

Nio expected it will deliver 72,000 to 75,000 vehicles for the quarer ended December, while analyts anticipated to be 77,955 units. Revenue that quarter is expected to be RMB19.68 billion to RMB20.38 billion, compared with analyts’ projection of RMB22.5 billion.

Nio vehicle sales shed 4.1% YoY to RMB16.7 billion for the third quarter, less than analysts estimated RMB17.24 billion. But vehicle margin increased to 13.1%, up from 11.0% a year earlier and 12.2% for the previous quarter. The margin was improved by lower material cost per unit, offseting a decline in average selling prices due to changes in the product mix. “Ongoing cost optimizations helped increase the vehicle gross margin to 13.1% in the third quarter of 2024. With continued expansion in sales volume and steady improvement in gross margin, our free cash flow turned positive this quarter,” said the Chief Financial Officer (CFO) Qu Yu.

Qu said Nio is confident to gradually leave up to the margin target of 15% for the fourth quarter. As Nio keeps enhancing the premium positioning of this brand for the year of 2025, the company will take 15% vehicle margin as a baseline, according to Qu.

Li told analyts on an earnings call that there will be facelifts and upgrades next year. Vehicles under the Nio brand will be upgraded to to the next-generation platform and ET9 will be the first product coming off from the latest-generation platform. For the ONVO brand, Nio will continue to deliver and sell its first product L60 next year. The EV maker also have two new family SUV models in the pipeline, ready to launch into the market next year. Li said Nio will make an official debut of the first vehicle model under its third brand Firefly at Nio Day in December, and the delivery will begin next year.

“Overall speaking, we are very confident with this product and brand lineup with that for the entire company, our sales volume next year will be doubling on top of this year's results,” said Li.

When asked about impact of the latest tariffs on Chinese EVs imposed by the European Union, Qu said Nio's strategy for the European market is always aiming for the long term. “At the moment, we will stay focused on improving our sales and service network. Understanding the needs of the local users and to improve our user satisfaction on the services and products,” said Qu. Out of the five European countries Nio has already entered, Norway is not affected by the tariff policy, Qu said.