Is Nio Racing Ahead? Surprising Q3 Results Revealed

Chinese electric vehicle startup Nio, Inc NIO reported third-quarter revenue of 19.07 billion yuan ($2.61 billion), up by 46.6% year-over-year and 117.4% from the previous quarter. Analysts, on average, estimated revenue of $2.63 billion for the quarter.

Vehicle deliveries were 55,432 in Q3 of 2023, up by 75.4% Y/Y and 135.7% Q/Q. Consequently, vehicle revenue climbed 45.9% Y/Y and 142.3% Q/Q.

Excluding share-based compensation expenses, the company reported a non-GAAP loss of 2.28 yuan ($0.31) compared to 2.11 yuan in the year-ago quarter and 3.28 yuan in the second quarter of 2023. Analysts had called for a loss of $0.43 per share.

Gross margin contracted to 8.0%, down from the year ago's 13.3% and the previous quarter's 1.0%, as vehicle margin declined from 16.4% a year ago to 11.0% due to changes in product mix, decreased battery cost per unit, however, had an offsetting impact. 

Cash and cash equivalents, restricted cash, short-term investment, and long-term time deposits were 45.2 billion yuan ($6.2 billion) as of September 30, 2023.

Founder, Chair, and CEO William Bin Li said, "According to the retail sales data from China Automotive Technology and Research Center, NIO ranked first in the battery electric vehicle market segment priced over RMB300,000 in China, with a market share of 45% in the third quarter of 2023."

On December 5, 2023, the company agreed to acquire manufacturing equipment and assets from Anhui Jianghuai Automobile Group Corp., Ltd. ("JAC"), a prominent state-owned automobile manufacturer in China and NIO's partner in producing all its current vehicle models. The acquisition includes assets from JAC's first and second advanced manufacturing bases, totaling approximately RMB 3.16 billion in consideration, excluding tax.

Nio's Forward Outlook: The company guided deliveries of 47,000-49,000 units for Q4, up 17.3% - 22.3% Y/Y. 

The company expects Q4 revenue of $2.20 billion-$2.29 billion, representing 0.1% - 4% Y/Y growth.

The stock has lost 24% year-to-date.

Price Action: NIO shares traded higher by 3.55% at $7.58 premarket on the last check Tuesday.

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