TLDR
- NIO reported Q2 operating loss of $567M, beating Wall Street estimates of $620M
- Vehicle deliveries surged 25.6% to 72,056 units but revenue growth slowed to 9%
- Average selling price dropped from $38,000 to $31,000 due to China’s EV price war
- August sales jumped 55% year-over-year to 31,305 vehicles
- Q3 delivery guidance targets record 87,000-91,000 units but revenue may disappoint
NIO Inc. (NIO) shares gained 2% in premarket trading Tuesday after the Chinese electric vehicle manufacturer reported better-than-expected operating results for the second quarter.
The Tesla competitor posted an adjusted operating loss of $567 million on revenue of $2.65 billion. Analysts had forecast a larger loss of approximately $620 million on similar sales figures.
The results mark improvement from last year when NIO recorded a $673 million operating loss on $2.4 billion in revenue. Revenue climbed 9% year-over-year to 19 billion yuan ($2.65 billion).
Net loss narrowed slightly to 4.9 billion yuan from 5 billion yuan in Q2 2024. Net loss per diluted share improved to 2.31 yuan from 2.50 yuan previously.
Strong Delivery Growth Drives Performance
NIO delivered 72,056 electric vehicles during the quarter, representing 25.6% growth compared to the same period last year. The delivery surge outpaced revenue growth, highlighting pricing pressures across China’s competitive EV market.
Gross profit margins expanded to 10% from 9.7% in the prior year quarter. The margin improvement came despite intense price competition among Chinese automakers.
August vehicle sales reached 31,305 units, marking a 55% increase versus August 2024. The strong monthly performance helped drive NIO shares up 4.6% in Hong Kong on Monday.
Pricing Pressure Squeezes Revenue Per Unit
The gap between delivery and revenue growth reflects the challenging pricing environment facing Chinese EV manufacturers. NIO’s average selling price fell to roughly $31,000 per vehicle from $38,000 in the year-ago quarter.
Competition has intensified as multiple manufacturers battle for market share in the world’s largest EV market. The price war has forced companies to choose between volume and profitability.
Record Quarter Expected Ahead
NIO expects third-quarter vehicle deliveries between 87,000 and 91,000 units, representing 40.7% to 47.1% growth compared to Q3 2024’s approximately 62,000 deliveries. This would establish a new quarterly record.
Combined July and August deliveries totaled 52,322 vehicles, leaving roughly 37,000 needed in September to meet guidance.
Third-quarter revenue guidance ranges from 21.8 billion to 22.9 billion yuan ($3.045-$3.193 billion). However, this falls below Wall Street’s $3.4 billion projection for the period.
NIO stock declined 3.6% in Hong Kong trading following earnings but remained up 0.9% for the week after Monday’s gains.
