Chinese EV Maker NIO Releases Second Quarter Financial Results as Apple Poises for Market Entrance

The Nasdaq-listed leading domestic EV maker NIO Inc (NYSE: NIO) announced on Aug. 11 its unaudited financial results for the second quarter, which ended on June 30, before the close of the US stock.

The financial report shows that NIO’s second quarter revenue increased by 146.5% year-on-year to 3.719 billion yuan, higher than Bloomberg’s forecast of 3.493 billion yuan, and exceeded the cap of 3.543 billion yuan predicted in the company’s business outlook in the previous quarter, according to Chinese tech media 36Kr.

NIO’s net loss was 1,176.6 million yuan, a sharp decrease of 30.4% from the first quarter of this year. Under non-general accounting standards (Non-GAAP), the net loss attributable to NIO shareholders narrowed from 3.286 billion yuan during the same period last year to 1.131 billion yuan in Q2, the company said in the financial report.

In the second quarter, NIO’s vehicle margin reached 9.7%, reversing the previous negative vehicle margin of -24.1%. The gross profit summed 313 million yuan, an increase of 817.3 million compared with a gross loss of 504.2 million in Q2 2019 and an increase of 480.6 million from a gross loss of RMB167.5 million in Q1 2020. Its gross margin turned positive in the second quarter, reaching 8.4%, reversing the previous negative gross margin.

NIO delivered 8,068 ES6s and 2,263 ES8s in Q2 2020, totalling 10,331, a record-high quarterly delivery with a robust increase of 190% compared with that of Q2 2019. Vehicle sales amounted to 3,486.1 million yuan in Q2 2020, soaring 146.5% from Q2 2019 and 177.6% from Q1 2020.

In June 2020, NIO completed the issuance of 72 million American Depositary Shares (ADSs) at US$5.95 per ADS, and an additional 10.8 million ADSs were allotted. The net proceeds raised from these new stocks will mainly be used for the company’s cash investment in NIO China and other working capital needs, NIO said in the report.

Looking forward, NIO expects the total revenue in the next quarter to reach between 4,047.5 million and 4,212.3 million, an increase of approximately 8.8% to 13.3% from Q2. The delivery volume is expected to be between 11,000 and 11,500, a year-on-year increase of approximately 120.4% to 129.3%.

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William Bin Li, NIO’s founding chairman and CEO, said in the report, “The current constraints on the productions will be lifted in the near future and we are confident that our production capacity can meet the accelerated demand of our models.”

NIO’s U.S. stocks closed at $14.21 on Monday, up 5.89%. As this article goes to press, NIO has risen over 7% before opening.

Recently, Apple has continuously acquired patents for auto-related technologies, including driving motors and vehicle styling, revealing the company’s firm determination to enter the auto industry, Chinese tech media My drivers reported.

Li said in the roundtable discussion at the 12th China Auto Blue Book Forum in Wuhan on Aug. 11 that Apple’s incursions will subvert the luxury car market, predicting that only five to six car-making companies will eventually survive.

“Apple will launch mass production models in 2024 or 2025, which is also expected to hit the market,” Li said. “I think there will be five to six leaders, including NIO, Apple, and Tesla, in the high-end vehicle market.”