Nio's third factory will officially start production in September, and some production lines will operate on a double shift basis as needed.
Nio (NYSE: NIO) today reported first-quarter 2025 financial results and held an analyst call afterwards.
Here are the key takeaways from the call, with the most recent placed at the top.
Nio currently has a standard payment term of 90 days for suppliers, with generally half paid in cash and half in bank acceptance bills.
As competition in the market intensifies, Nio's sales approach has gradually shifted from a purely OTD (Order to Delivery) model to one that prioritizes ready-to-deliver vehicles.
Nio's third factory will officially start production in September. Some of its production lines will operate on a two-shift system as needed.
Nio's current production capacity is sufficient to meet its plans for the fourth quarter.
Nio has partnered with more than 10 partners in over 15 overseas markets.
Nio's cash flow will improve significantly in the second quarter and gradually return to normal. Nio has set higher sales targets for the third and fourth quarters, and operating cash flow will continue to improve.
The L90 is a three-row SUV, while the L80 is a five-seat SUV. Both models are primarily aimed at the family market.
Nio is experimenting with a sales approach that does not involve physical stores in some regions, using battery swap stations as showrooms for its products and services.
Nio and Onvo's sales outlets will remain independent, but their middle and back-end systems will be integrated. The overall direction is for the Nio and Onvo brands to increase collaboration, rather than merge.
Nio has no plans in the short term to upgrade its top-selling models to an 800-volt high-voltage platform.
With a total monthly sales volume of just over 50,000 units for the three brands, a gross profit margin of 17 to 18 percent, R&D expenses controlled at 6 to 7 percent of revenue, and sales expenses controlled at less than 10 percent of revenue, profitability is achievable.
The gross margin of the updated Nio ES6 exceeds 20 percent, and that of the EC6 is even higher. The ET5 and ET5T have also seen an increase of more than 10 percentage points compared to the older models. The gross margin of the Nio brand is in a relatively good range.
Nio Inc's overall gross margin is expected to return to double digits in the second quarter. Its gross margin for the first quarter was 7.6 percent.
The Onvo L60 has the opportunity to return to monthly sales of over 10,000 units.
The L90 will be launched and begin deliveries in the third quarter. The L80 will be launched and begin deliveries in the fourth quarter. By the end of this year, Onvo will have three products, all of which are high-quality products focused on the family market.
Nio aims to achieve monthly sales of 25,000 units for Onvo's three models in the fourth quarter.
In less developed third- and fourth-tier cities, Nio will explore sales operations based on battery swap stations.
In less developed regions, Nio does not need to open stores and can use battery swap stations as product display locations.
Currently, there are more than 1,900 battery swap stations available for Onvo, and the number of available battery packs has also increased significantly compared to the beginning of the year.
In the long term, Onvo will also use Nio's in-house developed autonomous driving chip.
The Onvo team made significant adjustments, but this did not affect sales. Since late April, Onvo orders have been steadily recovering.
Onvo now has more than 440 stores.
Nio launched the NWM world model to users at the end of May, and so far, the feedback on the assisted driving system has been very positive.
Nio aims to keep R&D expenses between RMB 2 billion and RMB 2.5 billion in the fourth quarter.
In the fourth quarter, Nio will begin delivering its all-new ES8 SUV (sport utility vehicle).
The Nio brand has the chance to hit 25,000 monthly sales in the fourth quarter.
Nio will ensure that the gross margin difference exceeds 20 percent in the fourth quarter.
Nio has integrated the R&D resources of the three brands Nio, Onvo, and Firefly to improve the efficiency of the entire R&D team.
Starting from the second quarter, cost efficiency improvements will begin to take effect.
In terms of sales expenses, Nio hopes to gradually improve efficiency starting from the second quarter.
In terms of industrialization, Nio has further integrated its logistics, quality, and supply chain functions, and has also further streamlined the size of its teams.
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