NIO, Inc. (NYSE: NIO), a leading Chinese electric vehicle (EV) startup, has reported a strong second quarter, exceeding both revenue and delivery expectations. The company’s revenue reached 17.45 billion yuan ($2.40 billion), a remarkable 98.9% increase year-over-year and 76.1% from the previous quarter. This outpaced analyst estimates of $2.44 billion.
While NIO still reported an adjusted loss per share/ADS of (2.21) yuan or ($0.30) for the quarter, this marked a significant improvement from the (3.28) yuan loss in the same period last year and the (2.39) yuan loss in the first quarter of 2024. Analysts had anticipated a loss of $(0.31) per share. The stock price reacted positively to this news.
NIO’s strong performance was fueled by a surge in vehicle deliveries. The company delivered 57,373 vehicles in the second quarter, a staggering 143.9% increase year-over-year and 90.9% quarter-over-quarter. This resulted in a 118.2% year-over-year and 87.1% quarter-over-quarter jump in vehicle revenue. In July and August 2024, NIO delivered 20,498 and 20,176 vehicles respectively, bringing the total cumulative deliveries to 577,694 as of August.
Perhaps the most encouraging sign is the company’s improved profitability. Gross margin expanded to 9.7% in the second quarter, up from 1.0% a year ago and 4.9% in the previous quarter. This expansion was driven by an increase in vehicle margin, rising from 6.2% a year ago to 12.2%. As of June 30, 2024, NIO held a strong cash position with 41.6 billion yuan ($5.7 billion) in cash and cash equivalents, restricted cash, short-term investments, and long-term time deposits.
William Bin Li, founder, chairman, and CEO of NIO, expressed his satisfaction with the results, highlighting that NIO achieved a record-breaking delivery of 57,373 premium smart electric vehicles in the second quarter, capturing over 40% of the market share in the battery electric vehicle segment priced above RMB 300,000 in China.
Looking ahead, NIO expects to deliver 61,000–63,000 units in the third quarter, representing a 10.0%–13.7% year-over-year increase. The company forecasts third-quarter revenue of $2.630 billion–$2.707 billion, implying 0.2%–3.2% year-over-year growth. This estimate is slightly higher than the consensus of $2.54 billion.
Despite the impressive Q2 results, NIO’s stock price has faced challenges in recent months, declining by 61% over the past 12 months. This decline can be attributed to various factors, including weak domestic demand in the Chinese EV industry and protectionist tariffs. However, China’s plans to boost its stimulus program by subsidizing passenger vehicle purchases have provided a much-needed boost to the industry.
NIO’s strong Q2 performance suggests a positive trajectory for the company. The company’s ability to deliver on its targets, increase profitability, and navigate the evolving EV landscape bodes well for its future prospects. As of Thursday’s premarket trading, NIO stock was up 3.30% at $4.38.
