NIO Stock Falls After Q1 Earnings - Here's Why

NIO Inc NIO reported first-quarter FY23 sales growth of 7.7% year-on-year to RMB10.7 billion ($1.56 billion), missing the consensus of $1.63 billion.

Q1 vehicle deliveries increased 20.5% Y/Y to 31,041 units, down Q/Q by 22.5%. 

Vehicle sales declined by 0.2% Y/Y to RMB9.22 billion ($1.34 billion), and the vehicle margin contracted 1,300 basis points to 5.1% due to changes in product mix and increased battery cost per unit.

Gross profit for the quarter decreased 88.8% to RMB162.3 million ($23.6 million), and the gross margin contracted by 1,310 basis points to 1.5% due to the reduced vehicle margin.

Loss from operations widened to RMB(5.11) billion or $(744.3) million. Adjusted EPS loss of $(0.36) beat the consensus loss of $(0.41).

NIO held $5.5 billion in cash and equivalents as of March 31, 2023.

"NIO delivered 31,041 vehicles in the first quarter of 2023, ranking first in the premium battery electric vehicle market priced over RMB400,000 in China for 12 consecutive quarters," said William Bin Li, founder, chairman, and chief executive officer of NIO.

Outlook: NIO sees Q2 vehicle deliveries of 23,000 – 25,000, down by 8.2% - 0.2% Y/Y.

The company expects Q2 revenue of RMB8.74 billion ($1.27 billion) and RMB9.37 billion ($1.36 billion), down by 15.1% - 9.0% Y/Y.

Price Action: NIO shares are trading lower by 3.59% at $7.51 in premarket on the last check Friday.