21 Nov 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update NIO Inc. (NIO US) NIO's cost control disappoints us again Maintain HOLD. Despite NIO's efforts to lift GPM in 3Q24, its cost control capabilities disappointed us once again. With the Onvo L60's designed GPM and continuous investments in battery swap, we see limited GPM improvement in FY25E despite 45% YoY growth in revenue on our estimates. We are of the view that management's guidance for breakeven in FY26 is t ...

21 Nov 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update NIO Inc. (NIO US) NIO's cost control disappoints us again Maintain HOLD. Despite NIO's efforts to lift GPM in 3Q24, its cost control capabilities disappointed us once again. With the Onvo L60's designed GPM and continuous investments in battery swap, we see limited GPM improvement in FY25E despite 45% YoY growth in revenue on our estimates. We are of the view that management's guidance for breakeven in FY26 is t ...

KEY TAKEAWAYSNio's U.S.-listed shares are little changed in mid-day trading, after the Chinese electric vehicle maker posted quarterly sales that lagged analysts’ forecasts and a wider-than-expected loss.The Chinese company has had to lower prices of its cars amid an intense price war with rivals.Nio said it expects deliveries to reach up to a record 75,000 in the current quarter, from 61,855 in the third quarter. Nio's (NIO) U.S.-listed shares are little changed in mid-day trading, after the Chinese electr ...

Financial Data and Key Metrics - Total revenues for Q3 2024 were RMB18.7 billion, a decrease of 2.1% year-over-year but an increase of 7% quarter-over-quarter [17] - Vehicle sales were RMB16.7 billion, down 4.1% year-over-year, primarily due to a lower average selling price, but increased 6.5% quarter-over-quarter due to higher delivery volume [17] - Other sales grew by 19.2% year-over-year and 11.9% quarter-over-quarter, driven by increased sales of parts, accessories, and after-sales services [18][19] - Vehicle margin improved to 13.1% in Q3 2024, up from 11% in Q3 2023 and 12.2% in Q2 2024, mainly due to decreased material costs [20] - Overall gross margin was 10.7%, up from 8% in Q3 2023 and 9.7% in Q2 2024 [20] - R&D expenses increased by 9.2% year-over-year and 3.1% quarter-over-quarter, driven by higher personnel costs [21] - SG&A expenses increased by 13.8% year-over-year and 9.3% quarter-over-quarter, mainly due to higher sales and marketing activities [22] - Net loss was RMB5.1 billion, up 11% year-over-year but relatively stable quarter-over-quarter [23] - The company ended the quarter with total cash and cash equivalents of RMB42.2 billion [23] Business Line Performance - NIO delivered 61,855 vehicles in Q3 2024, maintaining its position as the top-selling BEV brand in China priced above RMB300,000 with a 48% market share [7] - The ONVO brand delivered its first model, the L60, starting September 28, targeting the mainstream family market [8] - NIO's Executive Flagship ET9 is in final testing and preparation for mass production, with deliveries expected to start in March 2025 [10] - The ONVO L60 is expected to reach a monthly production capacity of 10,000 units by December 2024 and 20,000 units by March 2025 [10] - NIO's third brand, Firefly, will debut on December 21, 2024, with its first product expected to be delivered in the first half of 2025 [11] Market Performance - NIO's smart driving system had over 610,000 users by October 2024, with 78.4% activating the "Navigate on Pilot" feature, driving over 1.39 billion kilometers [12] - The company has 176 NIO Houses and 412 NIO Spaces worldwide, while ONVO has 191 stores across China [12] - NIO has 2,737 power swap stations globally, including 887 on highways, and over 24,000 power chargers and destination chargers [13] - The company has started sales and delivery in the UAE and will open its first NIO House in the MENA region on November 28, 2024 [14] Strategic Direction and Industry Competition - NIO is focusing on improving profitability for its premium brand while expanding its product lineup with new models under the ONVO and Firefly brands [10][11] - The company secured RMB3.3 billion in strategic investment, reinforcing its balance sheet and reflecting investor confidence in its industry leadership [14] - NIO is accelerating its international market entry, with plans to expand further in 2025 with products from ONVO and Firefly [14] Management Commentary on Operating Environment and Future Outlook - Management expects Q4 2024 deliveries to be between 72,000 and 75,000 units [8] - The company is confident in its growth trajectory as new brands and products enter the market, with a focus on improving profitability and expanding globally [16] - NIO aims to achieve a 15% vehicle margin for the NIO brand in Q4 2024 and targets a 20% gross margin for the ONVO brand by 2025 [39][50] Other Important Information - NIO celebrated its 10th anniversary on November 25, 2024, marking a significant milestone in its journey [15] - The company continues to invest in R&D, with a focus on smart driving technologies and new product development [10][12] Q&A Session Summary Question: Brand Strategy Alignment and Potential Cannibalization - Management clarified that the decrease in NIO brand deliveries starting October was an active adjustment to reduce promotional costs, not a result of cannibalization by the ONVO brand [27][28] - The overlapping impact between NIO and ONVO brands is minimal, with only around 2% of users potentially choosing ONVO over NIO [28] Question: Production Ramp-Up and Bottlenecks - The ONVO L60's production ramp-up is slower due to its advanced technologies, but the company expects to reach 10,000 units per month by December 2024 and 20,000 units by March 2025 [31][32] - The company is preparing for the launch of the ET9 and Firefly products, with plans to address potential bottlenecks in 2025 [32] Question: Balance Between Profitability and Volume - Management aims to achieve a 15% vehicle margin for the NIO brand in Q4 2024 and targets a 20% gross margin for the ONVO brand by 2025 [39][50] Question: CapEx and OpEx Guidance for 2025 - The company expects OpEx to increase in 2025 due to new product launches and expansion, but SG&A expenses will gradually decrease as sales capacity is established [41][42] - CapEx for 2025 is expected to remain around RMB8 billion, with a focus on prudent management [43] Question: European Market Strategy and Tariff Impact - NIO has adjusted its pricing strategy in Europe due to increased tariffs but remains focused on long-term growth and improving user satisfaction [46][47] Question: Gross Margin Profile for ONVO Brand - The ONVO L60's vehicle margin is currently in the single digits but is expected to reach 10% in 2025 and 15% as production ramps up [50] Question: New Product Plans for 2025 - NIO plans to upgrade its existing products and introduce new models under the ONVO and Firefly brands in 2025, with a focus on competitive pricing and product performance [53][55] Question: Service Margin Improvement - The improvement in service margin in Q3 2024 was driven by cost optimization and increased sales volume, with further improvements expected in Q4 and 2025 [59][60] Question: Autonomous Driving Milestones - NIO is focusing on improving smart driving capabilities, with a target of making driving 10 times safer with smart driving assistance by 2025 [67] Question: Breakeven and Capital Requirements - The company expects to achieve positive free cash flow in Q4 2024 and aims to double its delivery volume in 2025, with a focus on narrowing losses and improving profitability [69][72] Question: Overseas Market Expansion - NIO plans to prioritize global expansion with the ONVO and Firefly brands, leveraging their broader market appeal and faster ramp-up potential [77][80] Question: Other Sales Growth and Loss - The company expects to continue improving the efficiency of its after-sales services while accelerating the deployment of power swap stations, which may lead to higher losses in the short term [82][84] Question: Demand Visibility for ONVO L60 - Management is confident in the demand for the ONVO L60, with a high conversion rate from test drives to orders, and plans to expand its sales and service network [87][89] Question: Next-Generation Platform NT3 - The ET9 will be the first model on NIO's next-generation platform, featuring advanced technologies such as high-voltage architecture and in-house developed chips for smart driving [91] Question: Operating Expenses and R&D Spending - R&D expenses are expected to remain around RMB3 billion per quarter in 2025, with fluctuations based on project stages, while SG&A expenses will increase with sales volume [95][97] Question: Share of Losses of Equity Investee - The increase in losses from equity investees in Q3 2024 was due to investments in upstream and downstream companies, but the battery-as-a-service business is showing promising profitability [99][100]

It has been a volatile couple of months for NIO Inc. (NYSE: NIO ) stock. Since NIO’s last earnings update , the stock had climbed close to 50% to more than $7 apiece, supported by a combination of ONVO-led momentum, sustainedAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

KEY TAKEAWAYSNio's U.S.-listed shares are slumping in premarket trading, after the Chinese electric vehicle maker posted quarterly sales that lagged analysts’ forecasts and a wider-than-expected loss.The Chinese company has had to lower prices of its cars amid an intense price war with rivals.Nio said it expects deliveries to reach up to a record 75,000 in the current quarter, from 61,855 in the third quarter. Nio's (NIO) U.S.-listed shares are falling in premarket trading, after the Chinese electric vehicl ...

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Nio Inc. (NYSE: NIO) is facing a sharp selloff in pre-market trading, plunging 4.75% to $4.63. Adding to the bearish sentiment, Nio is trading near its 52-week low, starkly underperforming the broader market. The S&P 500 is flirting with record highs, further emphasizing Nio’s struggles. Technical indicators point to the stock hovering near a support zone of $4.42 to $4.48, with a resistance range of $4.73 to $4.79. Breaking through this resistance will be critical for any meaningful recovery in the near te ...

Quarterly Total Revenues reached RMB18,673.5 million (US$2,661.0 million)iQuarterly Vehicle Deliveries were 61,855 units SHANGHAI, Nov. 20, 2024 (GLOBE NEWSWIRE) -- NIO Inc. (NYSE: NIO; HKEX: 9866; SGX: NIO) (“NIO” or the “Company”), a pioneer and a leading company in the global smart electric vehicle market, today announced its unaudited financial results for the third quarter ended September 30, 2024. Operating Highlights for the Third Quarter of 2024 Vehicle deliveries were 61,855 in the third quarter of ...