Nio reported weaker-than-expected revenue in the third quarter, which was also below its guidance range. It reported a net loss that was flat from the second quarter, with gross margin improving to 10.7 percent.
Nio (NYSE: NIO) posted weaker-than-expected third-quarter revenue, while gross margin improved and free cash flow turned positive.
The Chinese electric vehicle (EV) maker reported revenue of RMB 18.67 billion ($2.66 billion) in the third quarter, down 2.1 percent from the third quarter of 2023, but up 7.0 percent from the second quarter of 2024, according to unaudited financial results released today.
It was the second-highest quarterly revenue in its history, but fell short of analysts' expectations of RMB 19.17 billion in a Bloomberg survey and below the guidance range of RMB 19.11 billion to RMB 19.67 billion.
The company delivered a record 61,855 vehicles in the third quarter, within its guidance range of 61,000 to 63,000 vehicles, up 11.59 percent year-on-year and up 7.81 percent from the second quarter.
Nio today guided fourth-quarter vehicle deliveries to be in the range of 72,000 to 75,000 units, representing year-on-year growth of about 43.9 percent to 49.9 percent.
The guidance means Nio is expected to deliver a total of 51,024 to 54,024 vehicles in November and December, considering it delivered 20,976 vehicles in October.
It guided fourth-quarter revenue to be in the range of RMB 19.68 billion to RMB 20.38 billion, representing year-on-year growth of about 15.0 percent to 19.2 percent.
Nio's third quarter vehicle sales were RMB 16.7 billion, a decrease of 4.1 percent from the third quarter of 2023, but an increase of 6.5 percent from the second quarter of 2024.
The year-on-year decline in vehicle sales was primarily due to lower average selling prices as a result of changes in product mix, partially offset by higher deliveries, the company said.
Nio's cost of sales for the third quarter was RMB 16.67 billion, a decrease of 5.0 percent from the third quarter of 2023, but an increase of 5.8 percent from the second quarter of 2024.
The year-on-year decrease in cost of sales was primarily attributable to lower material costs per vehicle, partially offset by higher deliveries. The increase in cost of sales year-on-year from the second quarter of 2024 was primarily attributable to the increase in delivery volume, partially offset by the decrease in material cost per vehicle.
It reported gross profit of RMB 2.01 billion in the third quarter, an increase of 31.8 percent from the third quarter of 2023 and an increase of 18.9 percent from the second quarter of 2024.
Its third-quarter gross margin was 10.7 percent, the highest since the third quarter of 2022 and slightly higher than analysts' expectations of 10.6 percent. The figure was 8.0 percent in the third quarter of 2023 and 9.7 percent in the second quarter of 2024.
The increase in gross margin from the third quarter of 2023 was primarily attributable to higher vehicle margin and higher sales of parts, accessories and after-sales vehicle services with relatively higher margins. The increase in gross margin from the second quarter of 2024 was primarily attributable to higher vehicle margin.
Nio's vehicle margin was 13.1 percent in the third quarter, compared to 11.0 percent in the third quarter of 2023 and 12.2 percent in the second quarter of 2024.
Ongoing cost optimization helped vehicle gross margin improve to 13.1 percent in the third quarter of 2024, said Nio CFO Stanley Qu, adding that the company's free cash flow turned positive in the quarter as sales volumes continued to grow and gross margin steadily improved.
“Starting next year, our three brands are poised to embark on a robust product cycle, projected to elevate the Company's sales volume to new heights. We expect this momentum will drive continued improvements in the Company's operational and financial performance,” Qu said.
Nio's net loss for the third quarter was RMB 5.06 billion, an increase of 11.0 percent from the third quarter of 2023 and up 0.3 percent from the second quarter of 2024.
Excluding equity incentive expense, adjusted non-GAAP net loss for the third quarter was RMB 4.41 billion, an increase of 11.6 percent from the third quarter of 2023 and a decrease of 2.7 percent from the second quarter of 2024.
Nio spent RMB 3.32 billion on research and development in the third quarter, an increase of 9.2 percent from the third quarter of 2023 and an increase of 3.1 percent from the second quarter of 2024.
Excluding equity incentive expenses, non-GAAP R&D expenses were RMB 2.9 billion, an increase of 9.8 percent from the third quarter of 2023 and an increase of 0.5 percent from the second quarter of 2024.
The increase in R&D expenses from the third quarter of 2023 was mainly due to the increase in personnel costs for the R&D functions, the company said.
As of September 30, 2024, Nio's balance of cash and cash equivalents, restricted cash, short-term investments and long-term time deposits was RMB 42.2 billion.
Nio still hopes to expand global presence to up to 25 countries and regions by 2025
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