Nio is about to step up a notch

If you were with Nope (NO -7.21%) ride with investments from the beginning, it was not for the faint of heart. There have been wild ups and downs, bankruptcy rumors and capital raises. Despite all the twists and turns, it was easy to buy into the early hype, especially given that China’s electric vehicle (EV) market is years ahead of US luxury vehicles and the Nio is well received by consumers.

Now, the company might be kicking things up a notch — let’s give it a try.

What have you done for me lately?

Speaking of ups and downs, despite a 54% decline in the first half of 2024, Nio just had a great second quarter earnings result. Here are some of the highlights before we look at how the company could move into a higher gear.

Vehicle deliveries in the second quarter recorded 57,373 units, which were split between 32,562 premium electric SUVs and 24,811 premium electric sedans. The result of its vehicle deliveries was a staggering 143.9% year-on-year growth and a 90.9% increase from the first quarter of 2024.

The company’s vehicle margins came in at 12.2% during the second quarter, which compares favorably with the prior-year mark of 6.2% and the 9.2% figure in the first quarter. Revenue totaled $2.4 billion, which marked a 98.9% year-over-year increase and a 76.1% jump from the first quarter. And perhaps best of all, its net loss narrowed 16.7% year over year to $694.4 million.

Nio CEO William Bin Li doesn’t expect the momentum to drop from its record second-quarter shipment figure, saying, “The total shipment volume for the third quarter is expected to set another record, strengthening and further expanding market share”.

What’s next?

After Nio unveiled the first model of its second brand — the L60 — in May, the vehicles have just started rolling off the assembly line, and deliveries will begin shortly. Even though it’s just a model, it’s expected to be a huge step for the company as they hope the L60 can attack adzemarket share of Model Y in China.

The Onvo L60 price will undercut the Y by around $4,000 in China. The company is also opening more than 100 Onvo stores soon, a move that should help drive the vehicle into the hands of consumers. The company hopes the Onvo brand will help build on its current sales momentum; NIO delivered 128,100 vehicles through August, up 35.8 percent year-on-year.

Upper step?

Not only is Onvo expected to help fuel Nio’s momentum, it could just be the first step in that momentum. Consider that an even more affordable Nio brand is on the way, called the Firefly, which could challenge the industry with price tags between $14,000 and $28,000.

Nio already has momentum, posted a strong second quarter and has two brands poised to take the company into the next gear — investors today have good reason to be bullish about the electric vehicle maker’s prospects in the months and years ahead.