This post provides live updates on the key takeaways from Nio's fourth-quarter 2024 earnings call.
Nio (NYSE: NIO) today announced its financial results for the fourth quarter of 2024, followed by an analyst conference call.
The following are the main points from the call, with the latest at the top.
Nio believes that in the long term, for a smart EV company, annual sales of more than 2 million vehicles and a gross margin of 20 percent are the baseline for survival.
Nio will maintain its R&D expenses at RMB 3 billion per quarter this year, but will focus on projects that can bring high returns.
SG&A expenses will remain challenging in the first quarter. This is mainly because the first quarter is the slow season with lower sales, and the expansion of Onvo's personnel and sales capabilities is still in progress.
Subsequent models of the Nio brand will use the in-house developed Shenji autonomous driving chip. Onvo currently uses the Nvidia Orin chip and has no plans to use the Thor chip.
2025 is a big year for Nio's products, and suppliers' molds and some production facilities will gradually come into use. In addition, the company's F3 factory in Hefei will be put into operation, so this year's overall capital expenditure should increase compared to 2024.
Nio Inc has access to a wide range of financing channels, both in the US dollar market and the renminbi market. The company will flexibly arrange its capital market strategy according to the development of its business.
This year is a big year for Nio's products. With the increase in sales in the second quarter, the company is confident that its operating cash flow will improve significantly.
Since the first quarter, the company has made a lot of adjustments, and the financial effects will begin to be reflected in the second quarter's statements.
Overall, Nio will prudently manage its cash flow to ensure that existing resources can support the development of its business.
The Nio brand will maintain the current stable model range, which already covers the price range from RMB 300,000 to RMB 800,000.
The model range of Onvo will be kept to a reasonable size. Firefly currently only has one model, and there is no need to launch too many models for small boutique cars.
Nio Inc still targets doubling sales in 2025. The growth in sales will be driven mainly by new models.
Nio Inc is expected to see sales in the first quarter increase by about 40 percent year-on-year.
The Onvo L90 will be unveiled in April and deliveries will begin in the third quarter. Onvo will launch its third model in the fourth quarter. These two new models are in the relatively high-priced and high-profit margin range, and will greatly contribute to Onvo's gross profit growth.
Nio's in-house Shenji autonomous driving chip will be used in the updated ET5, ET5 Touring, ES6, and EC6, which will result in cost savings of about RMB 10,000 compared to the four Nvidia Orin chips previously used in these models.
The first quarter is the slow season, and the main Nio models are clearing inventory for a changeover, so the gross margin of the Nio main brand is under pressure. Overall, the gross profit margin in the first quarter is under pressure compared to the fourth quarter.
Nio In is aiming to achieve a gross margin of 20 percent for the Nio brand and 15 percent for the Onvo brand in the fourth quarter of 2025.
Onvo's sales outlets are all newly opened, and 60 percent of the sales staff joined within three months. It takes time to train and improve their sales capabilities.
Onvo had 105 stores when the L60 was launched, and now has more than 400 sales outlets.
Onvo outsold Nio-branded cars in 12 regions.
Currently, there are more than 1,500 battery swap stations available for Onvo, which has helped improve user word-of-mouth.
The user reputation of the Onvo L60 is good, and it has the highest user satisfaction Nio Inc has ever achieved.
With the improvement of brand awareness, the further maturity of the sales and service network, and the advancement of the battery swap network layout, sales of the L60 will gradually increase, reaching the company's target.
Even compared to Nio, Onvo's brand awareness is only one-third of Nio's.
After Onvo's existing orders have been fulfilled, it is indeed facing some pressure in terms of new orders.
Nio has increased its investment in expanding the brand awareness of Onvo and has also been more active in marketing on social media.
Onvo's sales since the beginning of the year have not met the company's expectations, due in the first place to the fact that Onvo, as a completely new brand, is far less well-known than its competitors.
Starting in the second quarter, Nio's financial statements should see improvements in cost and expense control.
With increased sales, improved gross margins, and expense control, the company is confident in achieving the goal of achieving profitability in the fourth quarter of this year as proposed to the internal team.
Nio expects to see an improvement in gross margins starting in the second quarter of this year.
Nio's investment in brand building and sales network expansion for Onvo will continue into the first quarter. However, the company is pushing to reduce costs from research and development to the supply chain.
Nio will launch a total of nine new models under three brands this year.
Nio's sub-brand Onvo achieved a positive vehicle margin in the early stage of production.
(Onvo officially launched its first model, the L60 electric SUV (sport utility vehicle), on September 19, 2024, with deliveries beginning on September 28.)
The call starts with a prepared speech by Nio founder, chairman and CEO William Li.
Nio posts record net loss in Q4 as SG&A rises further; gross margin improves slightly
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