Nio stock rallied Wednesday as Nio sees EV deliveries recovering on the back of demand for several new electric vehicles and expansion overseas.
But the Tesla China rival guided revenue low for the third quarter after Q2 losses came in worse than feared, reflecting cost pressures amid Covid-19 shutdowns in April and May.
In a statement early Wednesday, Nio CEO William Bin Li called the second half of 2022 a "critical period" for his EV startup. "Our deliveries started to recover" after falling in Q2 vs. Q1, Li added.
Nio targeted the launch of three new EVs in 2022, doubling its product lineup. It began delivering a new SUV, the ES7, to customers "at scale in August," according to Wednesday's release. And the new ET5 sedan is on track for start of production in late September, the release added.
In August, Nio also began shipping the luxury ET7 sedan to Europe. It began China deliveries of the ET7 this spring.
Early Wednesday, Nio guided Q3 deliveries of 31,000-33,000 EVs, rising as much as 35% year over year. It would also be 24%-32% higher, quarter over quarter.
The China startup had previously reported Q2 deliveries of 25,059 EVs and Q1 deliveries of 25,768 EVs.
"Nio will attract a broader user base and embrace robust growth in the coming quarters," Li said Wednesday. He pointed to brisk orders for new and more affordable EVs, as well as Nio's entry into new global markets.
Nio Earnings
For Q2, Nio lost 20 cents a share, while revenue climbed 22% to $1.54 billion.
Analysts polled by FactSet had expected net loss of 16 cents per American Depositary Share, widening from 6 cents a year ago, on revenue of $1.415 billion.
Gross margin fell to 13% in Q2 from 14.6% the prior quarter, Nio said Wednesday. It was negatively impacted by "cost volatilities" following Covid-19 shutdowns during the quarter, Nio CFO Steven Wei Feng said in the statement.
For the current Q3, Nio sees revenue of $1.918 billion-$2.03 billion, rising 31%-39% from a year ago. Wall Street had expected $2.38 billion, a 55% gain.
Nio expects to deliver 31,000-33,000 EVs in the current quarter. With 20,729 EVs delivered in July and August already, that implies September deliveries of 10,271-12,271.
Nio expects production to ramp up in Q4, with record deliveries every month in the quarter.
Nio Stock
Shares rallied 2.2% to 17.49 on the stock market today, snapping a three-session decline. Nio stock met resistance at the 50-day moving average in late August and remains far below the 200-day average.
Startup peers Li Auto and Xpeng gained Wednesday. On Tuesday, Li Auto stock edged lower to a three-month low while XPEV stock sank 5.1% to a record low.
China EV giant BYD popped 4.1% Wednesday. It rebounded 0.8% Tuesday, following a four-session plunge as Warren Buffett sold a small amount of his big stake. Tesla stock rose 3.4% Wednesday, after a bounce from its 50-day moving average Tuesday.
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Nio EV Sales, Growth Strategies
Once red-hot Nio has seen headwinds mount. Those headwinds include new export curbs on Nvidia, a Nio chip supplier. They also include fierce new competition and fresh Covid-19 lockdowns in China.
Founded in November 2014, Nio targets the Chinese market for premium electric cars. As of August, it had produced and sold almost a quarter-million electric vehicles since its inception.
EV sales more than doubled for Nio — and for China overall — in 2021. But the lingering chip shortage and other supply disruptions hit Nio's production and EV sales earlier this year.
In July, a shortage of casting parts hurt the production of Nio EVs, including the flagship new ET7 electric sedan. But Nio began delivering the new ES7 SUV on Aug. 28 and plans to launch the smaller ET5 sedan on Sept. 30.
While growing its EV lineup, Nio plans to expand abroad. It began shipping the new ET7 to Europe in August. Nio already sells older-gen EVs in Norway and aims to be in 25 countries by 2025.
Various reports suggest that Nio could launch a mass-market EV, challenging the likes of Volkswagen in China.
