NIO, Inc. (NYSE: NIO), a leading Chinese electric vehicle (EV) manufacturer, released its fiscal third-quarter 2024 results, revealing a mixed bag of successes and challenges. While the company demonstrated progress in several key areas, broader market headwinds and weaker-than-expected domestic demand weighed heavily on its stock performance.
Financial Highlights:
NIO reported revenue of 18.67 billion yuan ($2.66 billion), a slight 7% increase quarter-over-quarter but a modest 2.1% year-over-year decline. This marginally missed analyst expectations of $2.70 billion. Despite the revenue dip, the company showcased improved profitability. The adjusted loss per share, excluding share-based compensation, was 2.14 yuan (31 cents), a significant improvement compared to 2.28 yuan in the same quarter last year and 2.21 yuan in Q2 2024. This result also beat analyst predictions of a 32-cent loss per ADS.Vehicle deliveries continued to show upward momentum. NIO delivered 61,855 vehicles in Q3, representing an 11.6% year-over-year increase and a 7.8% quarter-over-quarter rise. October 2024 saw another strong month with 20,976 vehicles delivered, bringing the cumulative total deliveries to an impressive 619,851. Vehicle revenue, however, saw a 4.1% year-over-year decline, though it grew by 6.5% compared to the previous quarter. A key factor in improved profitability was the expanding gross margin, reaching 10.7%, up from 8.0% a year ago and 9.7% in the previous quarter. The vehicle margin specifically jumped to 13.1% from 11.0% year-over-year.
Strategic Initiatives and Future Outlook:
NIO’s strong financial position is evident in its robust cash reserves. As of September 30, 2024, the company held 42.2 billion yuan ($6.0 billion) in cash and equivalents. CEO William Bin Li highlighted NIO’s significant market share in the premium EV segment, claiming over 40% of China’s BEV market for vehicles priced above RMB 300,000 during the first nine months of the year. The launch of the ONVO L60 and the upcoming mass production of the ET9, its executive flagship, are poised to further strengthen NIO’s position in the luxury EV market. The company is also expanding its reach with the introduction of Firefly, a new boutique compact vehicle brand, at NIO Day 2024. Further bolstering the positive outlook are the ongoing cost optimization efforts which resulted in positive free cash flow during the quarter and a projected significant sales increase with the launch of new products across its three brands next year.NIO’s Q4 guidance projects deliveries of 72,000–75,000 units, representing a 43.9%–49.9% year-over-year increase. Revenue is anticipated to reach $2.804 billion—$2.904 billion, signaling a 15.0%–19.2% year-over-year growth. Despite this positive outlook, NIO’s stock price remains under pressure. It’s down over 45% year-to-date, a trend attributed to the broader challenges facing the Chinese EV industry, including weak domestic demand and protectionist tariffs, coupled with some disappointment over government fiscal stimulus.
