Tesla Rival Nio's Loss Widens In Q3 But Revenue Beats Expectation; How COVID-19 Impacts Forward Guidance

Nio Inc. NIO reported on Thursday a wider loss for the third quarter but revenue exceeded the consensus estimate. The guidance for the fourth quarter — one marred by supply chain and production disruptions amid the COVID-19 lockdowns — came in below expectations.

What Happened: Nio reported a net loss, excluding stock-based compensation, of 3.46 billion yuan ($486.3 million) or 2.11 yuan per share ($0.30). The bottom-line results widened from 0.36 yuan in the third quarter of 2021 and 1.34 yuan in the second quarter of 2022.

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Revenue rose 32.6% year-over-year and 26.3% quarter-over-quarter to 13.0 billion yuan ($1.83 billion). This exceeded the consensus estimate of $1.77 billion.

Vehicle sales accounted for about 92% of the total revenue and vehicle margin contracted from 18% in the year-ago quarter and 16.7% in the preceding quarter to 16.4%. The company delivered 31,607 cars in the third quarter, up 29% year-over-year and 26% sequentially.

“Following the delivery of our new product lineup based on NIO Technology 2.0 catering to different market segments, we have witnessed strong growth momentum in user demand and robust foot traffic, especially after the debut of ET5s in stores from September,” said CEO William Li.

He expects the ET5 delivery to support a substantial acceleration of our overall revenue growth in the fourth quarter of 2022.

The company noted that cash and cash equivalents, restricted cash, short-term investments and long-term deposits totaled $7.2 billion as of Sept. 30.

What’s Next: Nio, which competes with Tesla Inc. TSLA in the Chinese market, guided to fourth-quarter deliveries of 43,000-48,000 units, up about 72%-92% from a year ago.

The company expects revenue of $2.44 billion to $2.70 billion, below the $3.14 billion consensus estimate.

Price Action: In premarket trading on Thursday, Nio shares were slipping 1.51% to $9.11, according to Benzinga Pro data.

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