Nio’s Q2 revenue beat expectations as its losses narrowed

Nope (NO 14.39%)a prominent name in premium smart electric vehicles (EVs), released its second-quarter 2024 results on September 5, reporting higher-than-expected vehicle deliveries and total revenue. The Nio delivered 57,373 vehicles, above the 56,000 that had been the upper end of its guidance range. Revenue was 17.446 billion yuan (about $2.4 billion), compared with the top estimate of 17.135 billion yuan. Despite this, Nio reported a significant net loss of 5.046 billion yuan, although this was a smaller loss than in the year-ago period.

Source: Management guidance from the Q1 2024 earnings report, released on June 6.

Understanding Nio

China-based Nio is a major player in the electric vehicle sector, primarily catering to its domestic market with a range of smart electric SUVs and sedans. The company’s integrated ecosystem provides energy solutions and services, such as battery swapping and home charging, that improve the customer experience. Recently, Nio has focused on expanding its market and improving its technology and production capabilities. Key factors for its success include maintaining a versatile product line, innovative power packs and superior after-sales service.

In Q2 2024, Nio focused on increasing vehicle deliveries, improving its gross margin and expanding its charging and battery exchange network. It also focuses on innovations in self-driving.

Quarterly highlights

Nio delivered 57,373 vehicles in the second quarter, with a mix of 32,562 premium smart electric SUVs and 24,811 premium smart electric sedans, driven by strong demand for its new models.

Total revenue for the quarter reached 17.446 billion yuan (about $2.4 billion). Comparatively, vehicle sales rose to 15.68 billion yuan, up 118.2% year-on-year.

Gross profit also rose 1,841 percent to 1.689 billion yuan, and its gross margin improved sharply to 9.7 percent from 1.0 percent in the year-ago period.

However, Nio’s operating loss remained high at 5.209 billion yuan ($716.8 million), although this was 14.2% less than it lost in Q2 2023. Similarly, the loss net was 5.046 billion yuan ($694.4 million), down 16.7% from the same quarter last year.

Nio has made significant progress in its technology and service packages. The AI-themed Nio IN 2024 event showcased a full-domain intelligent driving chip and vehicle operating system. These innovations are aimed at improving vehicle characteristics and achieving cost competitiveness. In addition, in August it announced its “Power Up Counties” plan to strengthen its charging and battery swapping network in China.

During the quarter, the company also issued 30 million Class A shares to facilitate future exercise options and stock incentive awards.

Looking ahead

In Q3, Nio expects to ship between 61,000 and 63,000 electric vehicles. Total revenue for the quarter is estimated to be between 19.109 billion yuan ($2.630 billion) and 19.669 billion yuan ($2.707 billion).

Investors should note Nio’s continued efforts to increase vehicle margins and manage operating costs. The coming quarters will be critical as the company aims to leverage its technological innovations and expanded product offerings to drive growth while improving profitability.