Fresh from Shenzhen where NIO unveiled its new EC6 and an updated ES8 at its packed NIO Day, the company also announced its Q3 earnings before the end of the calendar year. Despite a tumultuous 2019 in which NIO maneuvered the end of Chinese electric vehicle (EV) subsidies and a battery recall (partly due to the battery company), it managed to increase sales towards the end of the year.
“The Quarterly Total Revenues reached US$257M (RMB 1,836.8) with 4,799 quarterly deliveries of the ES8 and the ES6. These unaudited financial results for 2019 Q3 ended as predicted and show a positive climb, confirmed with the last few months.
“Overall, sales went back up after a slow start in 2019.”
|NIO Sales||2019 Q3||2019 Q2||2019 Q1|
As noted above, sales were US$242.5M (RMB 1,733.5 million) in Q3 2019. This an increase of 22.5% from Q2 2019 and 21.5% up from the same quarter of 2018. Vehicle margin – calculated based on revenues and cost of sales derived from vehicle sales only – was -6.8%, compared with -24.1% in Q2 2019 and -4.3% in the same quarter of 2018. So, overall, it’s a more positive result than expected if you expected anything similar to the Q2 result.
Gross margin was -12.1%, compared with -33.4% in Q2 2019 and -7.9% in the same quarter of 2018.
NIO registered a US$337.1M (RMB2,409.2) loss from operations in Q3 2019. This is a decrease of 25.3% from Q2 2019 and 14.3% from the same quarter of 2018. The net loss was US$352.8M (RMB 2,521.7) in Q3 2019. This means a decrease of 23.3% from Q2 2019 and 10.3% from the same quarter of 2018.
You can read the entire earnings report here.
NIO had a tough 2019, but managed to steady and even raise sales. It isn’t profitable yet, but I don’t see that as negatively as some of the media do. From the perspective of someone who has covered the industry for the past 13 years, plenty of green mobility startups have operated in the red for years, if not a decade or more. It takes a long time for a mobility startup, or any automotive company, to climb into the black.
The company announced a new 100-kWh battery pack and 20-kW DC Power Home. The deliveries of the 100-kWh battery pack should happen in Q4 2020. It will significantly improve the driving range of its EVs, esp. considering NIO also offers battery swapping in a growing number of swap stations. NIO drivers have greater driving flexibility than other EV drivers thanks to NIO’s “Battery as a Service,” which should give the drivers strong range confidence.
The newly unveiled EC6 is the 3rd smart premium electric SUV from NIO. The performance version comes with the company’s 160-kW permanent magnet motor and a 240-kW induction motor that will help it spring a 0–60 MPH (0–100 km/h) time of 4.7 seconds. The NEDC range is expected to be 615 km — probably around 280 miles WLTP, but we don’t know yet. NIO will announce the prices and specifications in July.
NIO also announced its smart, premium, upgraded ES8 electric SUV with a 100-kWh battery pack. That bumps the range up to 580 km NEDC, which should give it roughly 250 miles WLTP.
William Bin Li, founder, chairman, and chief executive officer of NIO, was optimistic and even upbeat at the NIO Day. He acknowledged the problems but said overall the company was doing well. Li said: “Despite the challenges, NIO’s sales improved solidly since September.” Obviously, NIO will need more faith from its investors, as the decisive years will be 2020 (when the industry expects a general slow down), 2021, and 2022. The latter will be the years where EVs are expected to be seen as mature to much more of the public and thus reacher a wider acceptance among consumers.
Li followed up with something I feel financial statistics have a hard time calculating, NIO’s very active community: “Our strong performance was attributable to the competitiveness of our products and services, the recognition and strong support from our user community, and our sales network expansion strategy as we continue to launch more efficient NIO Spaces.” I was particularly impressed with the enthusiasm of the strong community NIO has. It doesn’t hesitate to put money in for building and expanding the community through NIO Houses even – where NIO owners can come and congregate with various activities for the family. It reminds me somewhat of another community that has helped a certain Californian EV startup do so well over the years.
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