Nio, the Chinese electric vehicle manufacturer, has fallen short of expectations in its first-quarter results, experiencing a decline in both deliveries and revenue compared to the previous year. The company reported a larger net loss than anticipated, largely due to lower prices negatively impacting its financial performance.
During the first quarter, Nio delivered 30,053 vehicles, in line with its revised projections from March. This figure represented a decrease from the 31,041 vehicles delivered in the first quarter of the previous year. The decline in vehicle deliveries was accompanied by a 7% drop in revenue, amounting to 9.91 billion Chinese yuan ($1.37 billion). Analysts had expected revenue to remain relatively stable at approximately 10.61 billion CNY.
The reduction in revenue was attributed to the combination of fewer deliveries and lower average selling prices. Nio highlighted the competitive dynamics within the Chinese electric vehicle market, where companies have been adjusting prices to compete with both local competitors and global giant Tesla (TSLA).
The financial results also revealed a net loss of 5.18 billion CNY, exceeding the 4.48 billion CNY loss forecasted by analysts. Earnings per share were similarly lower than expected, with Nio reporting a loss of 2.57 CNY per share, compared to the projected 2.31 CNY.
Looking ahead, Nio anticipates a significant improvement in its performance for the second quarter. The company has already sold over 36,000 vehicles in the first two months of the current quarter, exceeding the figures for the same period in the previous year. Nio projects its deliveries to more than double compared to the previous year, with an estimated range of 54,000 to 56,000 vehicles for the entire quarter.
Revenue guidance for the second quarter also paints a positive outlook, with Nio expecting a near doubling from the same period in the previous year. The company forecasts revenue to range from 16.59 billion to 17.14 billion CNY, surpassing analysts’ expectations of 14.59 billion CNY.
Despite these optimistic forecasts, Nio’s American depositary receipts (ADRs) experienced a 3.8% decline to $5.07 in premarket trading, adding to a year-to-date decrease of nearly 45%. This downward trend reflects the market’s response to the company’s recent financial performance and future projections.
In conclusion, Nio’s first-quarter results and reduced deliveries have presented the company with a significant setback. However, the company’s anticipation of improved performance in the second quarter indicates a potential turnaround. The competitive landscape in the Chinese electric vehicle market, along with Nio’s strategic positioning, will likely continue to influence the company’s financial trajectory.
Sources:
1. Visible Alpha
2. Nio official financial reports