Chinese electric car maker Nio Inc. reported a wider-than-estimated loss in the second quarter as vehicle deliveries came in at the low end of the company’s target.
(Bloomberg) — Chinese electric car maker Nio Inc. reported a wider-than-estimated loss in the second quarter as vehicle deliveries came in at the low end of the company’s target.
The automaker posted a net loss of 6.06 billion yuan ($831 million) in the three months ended June 30, it said in a statement Tuesday. That was wider than the average analyst estimate of 4.73 billion yuan, according to data compiled by Bloomberg, and more than double a 2.76 billion yuan loss in the same period last year.
Revenue dropped 14.8% to 8.77 billion yuan, as quarterly deliveries fell 6% to 23,520 vehicles, at the bottom of the company’s forecast. Gross margin continued to drop, down to 1% from 13% a year earlier and 1.5% in the previous quarter.
While senior executives earlier this year claimed to be “very confident” of doubling sales to 250,000 vehicles in 2023, Nio only managed to ship 54,561 cars in the first half — just over 20% of its annual goal. It also missed its annual target last year, and has been forced to delay investments in fixed assets, postpone research and development plans, and be more cautious on its overseas expansion.
Nio’s sluggish sales and unsatisfactory earnings have raised concerns over the future of the company, which three years ago was on the brink of collapse before a local government rescue. Now analysts are wondering how long a $738.5 million investment from Abu Dhabi’s CYVN Holdings LLC might last.
More recent figures point to some improvement. Nio delivered a record 20,462 units last month after the company cut prices, joining the price war engulfing the Chinese market, and rolled out two new versions of its cars in the space of a month. More than 10,000 of the cars shipped in July were the revamped ES6 unveiled in late-May.
“Attributed to the product transition based on the NT2.0 Platform, coupled with the expansion of our power network and the strengthening of our sales capabilities, we expect a solid growth in vehicle deliveries in the second half of 2023,” Chief Executive Officer William Li said in the statement.
The company said it plans to deliver 55,000 to 57,000 vehicles in the third quarter, which will generate a revenue of between 18.90 billion and 19.52 billion yuan.
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