Have Nio's Ramped Up Production and Deliveries Put It in the Driver's Seat?

Cars and Drivers

Published: August 11, 2020 12:53 pm

When Nio Ltd. (NYSE: NIO) reported its most recent quarterly results before the markets opened on Tuesday, the electric vehicle maker said that it had a net loss of $0.15 per share on $526.4 million in revenue. Analysts were calling for a net loss of $0.26 per share and $504 million in revenue. The same period of last year reportedly had a net loss of $0.44 per share and $215.56 million in revenue.

During the latest quarter, the firm delivered 10,331 vehicles, including 8,068 ES6s and 2,263 ES8s, compared with 3,553 vehicles delivered in the second quarter of 2019 and 3,838 vehicles delivered in the first quarter of 2020.

Quarterly vehicle margin reached 9.7%, and gross margin reached 8.4%. Vehicle sales increased 146.5% year over year to $493.4 million in the second quarter, this was an increase of 177.6% sequentially.

The increase in vehicle sales of the second quarter of 2020, compared to the second quarter of 2019, was mainly contributed by the sales of the ES6, which began deliveries in late June 2019. The increase in vehicle sales of the second quarter of 2020, compared to the first quarter of 2020, was due to the increase of vehicle deliveries recovered from the COVID-19 outbreak in China.

In June, the firm completed an offering of 72 million American depositary shares. Nio plans to use the net proceeds from the ADS offering mainly to fund its cash investments in Nio China, as well as for other working capital needs. The firm expects Nio China to use the cash investments for research and development of products, services and technology, development of its manufacturing facilities and roll-out of our supply chain, among other things.

On the books, cash and cash equivalents totaled $1.49 billion at the end of the quarter.

Nio stock traded down about 5% on Tuesday, at $13.53 in a post-IPO range of $1.19 to $16.44. The consensus price target is $6.66.

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