NIO
Inside the Numbers
In Q3, the company reported a net loss of $129 million which was slightly worse than expectations of a $70 million loss. Revenue topped expectations at $1.5 billion vs expectations of $1.36 billion. This was a 102% improvement from last year and a 12% improvement from Q2. Net loss and operating income widened on a sequential basis by about 12% and on an annual basis by 30%.
The company's gross margin also expanded to 20.6% from 12.8% and ticked higher from 18.6% in the second quarter. This is expected as higher production volumes mean that per-unit costs decline due to increased scale, efficiency, and buying power. While gross margin was higher, vehicle margins were actually lower due to "increased financing at subsidized rates for vehicle purchases which resulted in a deduction of vehicle revenue and an increase in tooling depreciation cost."
In the quarter, Nio delivered 24,439 vehicles which was more than double what it delivered last years. It also was better than slightly reduced expectations as the company had warned about the impact of supply chain issues.
The company also provided an update on its highly anticipated ET7 Luxury Electric Sedan which should be available early in 2022. Some other looming catalysts for Nio are that it is expected to begin selling in Norway early in 2022 and in Germany later in the year. It is also planning to release 2 more new models in 2022.
These are the major factors, in addition to the positive macro environment for EVs, propelling Nio higher despite the company posting a bigger loss than expected.
Another positive for Nio is that it has strong demand for its product despite its higher price point. The brand has a cult following, charismatic founder and CEO, and is known for its aesthetics like Tesla
