Nio Shares Drop After Big Revenue Miss And Warning

June 9, 2023

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The U.S.-listed shares of Nio Inc., a China-based electric vehicle manufacturer, experienced a decline on Friday following the release of their first-quarter financial results. The reported revenue fell short of expectations due to a decrease in average selling prices, and the company also issued a warning of a significant miss in the current quarter.

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Chief Financial Officer Wei Feng acknowledged the changing market environment and emphasized their commitment to promptly observe and analyze the dynamics of the operating environment and competition landscape. He stated that Nio would continue to strengthen its competitive advantages in an agile and efficient manner.

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Upon the release of the results, Nio's stock initially dropped by as much as 6.3%, but later recovered slightly to a 2.4% decline in the premarket.

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In the first quarter ending March 31, net losses widened to RMB4.86 billion ($707.6 million), or RMB2.91 per American depositary share, compared to RMB1.27 billion, or RMB1.12 per ADS, in the same period of the previous year. Adjusted per-ADS losses, excluding nonrecurring items, were RMB2.51, which fell short of the FactSet consensus of RMB2.80.

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Total revenue increased by 7.7% to RMB10.68 billion ($1.55 billion), but it was significantly below the FactSet consensus of RMB11.80 billion. Vehicle sales experienced a slight decline of 0.2% to RMB9.224 billion. Nio attributed this decrease to a lower average selling price resulting from a higher proportion of ET5 and 75 kWh standard-range battery pack deliveries, although it was partially offset by an increase in delivery volume.

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The cost of sales outpaced the revenue growth, rising by 24.2%, which caused the gross margin to contract from 14.6% to 1.5%. Despite this, deliveries saw a healthy increase of 20.5% to 31,041 vehicles.

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Looking ahead to the second quarter, Nio anticipates total revenue between RMB8.74 billion and RMB9.37 billion, falling below the consensus of RMB17.98 billion. The company also projects deliveries between 23,000 and 25,000 vehicles, down from 25,768 vehicles in the same period last year.

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Over the past three months leading up to Thursday, Nio's stock has experienced a decline of 11.4%, while the S&P 500 has gained 9.6%.

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