Nio reports larger losses in the second quarter due to the slowdown in China and product line reshaping

Nios ET5 is on display at Central China International Auto Show on May 25, 2023 in Wuhan, China.

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Chinese manufacturer of electric vehicles noo lost $835.1 million in the second quarter, more than double the prior-year loss, as deliveries of its high-end electric vehicles fell due to the transition to an updated vehicle platform and a general economic slowdown in China.

Here are the key numbers from Nios earnings for the second quarter reportcompared to Wall Street estimates by Refinitiv.

  • Revenue: 8.77 billion yuan (US$1.21 billion), versus 9.25 billion yuan expected.
  • Adjusted loss per share: 3.28 yuan (45 cents), versus an expected 2.45 yuan.

Shares of the company fell more than 6% in premarket trading following the news.

Nio's restated numbers exclude stock-based compensation expense. On a GAAP basis, the company reported a net loss of $835.1 million, or 51 cents a share.

In Chinese yuan, the company reported a net loss of 6.06 billion, or 3.70 yuan per share. A year ago, Nio reported a net loss of 2.76 billion yuan, or 1.68 yuan per share, on revenue of 10.29 billion yuan.

Nio's gross margin in vehicles was 6.2% in the second quarter, down from 16.7% a year earlier but up from 5.1% in the first quarter of 2023.

Nio launched a facelifted version of its flagship ES6 crossover on its new “NT2.0” platform in May and a station wagon version of its ET5 sedan in June. The updated product range is already achieving better results: 20,462 vehicles were delivered in July alone.

The company delivered just 23,520 vehicles in the second quarter as it sold the last of its predecessor models at significant discounts.

CEO William Bin Li said in a statement that July's earnings were enough to push Nio to the top of China's electric vehicle sales chart this month with a price tag of over 300,000 yuan (about $41,000).

“We expect solid growth in vehicle deliveries in the second half of 2023,” he said.

Nio also increased its balance sheet in July, completing a $738.5 million equity investment on July 12 from a fund controlled by the Abu Dhabi government. At the end of June, the company had $4.3 billion in cash and equivalents.

Nio now expects to deliver between 55,000 and 57,000 vehicles in the third quarter, a significant increase from the 31,607 EVs delivered in the third quarter of 2022. The company expects sales for the period to be between $2.61 billion and $2.69 billion -$ will decrease from $1.83 billion in the same period last year.

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