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Bad report card! NIO made a huge loss.

2024-04-24 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Without accident, NIO lost a huge amount of money again!

Before the US stock market opened on August 29th, Xilai officially released its results for the second quarter of 2023, and a bad financial report card was released to the public. According to the financial report, the revenue of NIO in the second quarter was 8.772 billion yuan, down 14.8% from the same period last year and 17.8% from the previous year, of which automobile sales were 7.185 billion yuan, down 24.9% from the same period last year and 22.1% from the previous month. It is understood that the previous 12 consecutive quarters of business revenue growth, the revenue are lower than the same period last year, and lower than market expectations.


The decline in revenue has something to do with the decline in sales. According to the financial report, the delivery volume of Ulai in the second quarter was 23520, down 6.1% from the same period last year and 24.2% from the previous month, barely fulfilling the previous delivery forecast of 23000-25000 vehicles. This is also the lowest sales in the past two years, mainly due to the control error of intergenerational switching of NIO products, which led to the trough of sales, and this is not the first time that sales have fallen as a result of product iteration.


Revenue is falling month-on-month, losses are getting bigger, and cash flow is getting smaller and smaller. According to the financial report, NIO posted a net loss of 6.056 billion yuan in the second quarter, an increase of 119.6% over the same period last year and 27.8% month-on-month growth. As of June 30, 2023, the cash reserve of Lulai was 31.5 billion yuan, compared with 37.8 billion yuan at the end of the first quarter.

The price cut directly pulled down NIO's gross profit margin. On June 12, Xilai announced that it would adjust the rights and interests of users and the prices of all new models, reducing the price of new cars by 30,000 yuan. After the price adjustment, the price of the whole car is less than 300000 yuan for the first time, of which the starting price of ET5 is 298000 yuan. According to the financial report, the gross profit margin of Lulai was 1.0% in the second quarter, compared with 13.0% in the same period in 2022 and 1.5% in the first quarter of 2023. From this point of view, the price reduction and poor sales have a great impact on revenue, profit and gross profit margin.


Only R & D and administrative expenses have achieved growth. In terms of R & D expenses, it was 3.345 billion yuan in the second quarter, an increase of 55.6% over the same period last year and 8.7% month-on-month, mainly due to the increase in R & D personnel costs and equity incentive fees, and the increase in the design and development costs of new products and new models. In terms of sales, general and administrative expenses, it was 2.857 billion yuan in the second quarter, an increase of 25.2% over the same period last year and 16.8% month-on-month, mainly due to the increase in the cost of sales staff, the increase in sales and marketing activities, and the related expenses related to the expansion of the company's sales and service network.

Overall, the performance of NIO in the second quarter is very poor, the decline in delivery volume and price reduction sales have a direct impact on revenue, profit, gross profit margin performance. Li Bin said on the conference call that the current market environment is full of challenges, and the competition in the intelligent electric vehicle market is becoming increasingly fierce. Ulai is ready in terms of core technology, product layout, sales capability, manufacturing and supply chain, etc., focusing on the implementation of marketing and sales strategies to promote a steady increase in delivery volume.


However, Li Bin is still full of expectations for the future performance of NIO, and NIO expects third-quarter revenue to reach 18.9 billion yuan to 19.52 billion yuan, an increase of 45.3% to 50.1% from a year earlier. At the same time, as sales grow, gross margins are expected to rise steadily in the second half of the year, with a chance to return to double digits in the third quarter, and could reach 15% in the fourth quarter if some other costs of the battery are controlled.

If NIO wants to achieve sales growth, it still depends on selling cars. On June 15, ET5T went public with a price range of 29.8-356000 yuan. Earlier, the price of all the new cars in NIO was reduced by 30, 000 yuan, of which the starting price of the ET5 was 298000 yuan. The launch of new cars and price cuts have had an immediate impact on sales, with deliveries reaching an all-time high of 20462 in July, while NIO delivered a total of 16000 as of Aug. 27, and is likely to exceed 20, 000 again in August.

"our goal is to stabilize monthly sales at more than 20,000 units," but this is not the ultimate goal. "the goal is to achieve the sales capacity of 30,000 units per month, and the results of sales capacity-building have gradually begun to emerge since October." Li Bin said that Xilai plans to launch and deliver the new EC6 in September, thus completing all product switching based on the second-generation technology platform, and when the eight second-generation models are fully on the market, it will be able to cover 80 per cent of the needs of users in the high-end market.

Li Bin revealed that next year, the NIO brand will not have a new product delivery, but sales, gross margin, product quality and so on have reached a better state. However, the mass market brand Alps will release its first product in the second half of 2024, and the development of the product is well under way, and a second car under the brand is already under development. Li Bin stressed that the brand development concept for the mass market is different from the NIO brand, it will pursue the sales of each car more, the number of models will not be very large, and it will focus more on the home market, while Ulay will use eight models to meet the more personalized needs of the high-end market.


In addition, the NIO mobile phone will be released in late September and is expected to be equipped with UWB technology to provide efficient and convenient car remote control experience services for NIO car owners. Li Bin said that the launch of the mobile phone is very meaningful to increase the competitiveness of cars. It is not to enter the mobile phone field, but to meet the needs of users for mobile phones to better match cars. Qin Lihong, co-founder and president of NIO, stressed that he would never hang advertisements on his mobile phone and would never rely on advertisements to make money.

With the full product switching of the second-generation technology platform, NIO will enter a stable period, and as Alpine brands become more popular and support power exchange models on the market, it will be easier for NIO to sink to third-and fourth-tier cities. That may be why sales and gross margins will rise even if the NIO brand doesn't have a new car on sale next year. At present, it seems that the total investment in power exchange and services is expected to be rewarded in the future.

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