Nio plans to start delivering its ET7 electric sedan in 2022.
Evelyn Cheng | CNBC
GUANGZHOU, China – Nio shares rose more than 1% in after-hours trading on Wednesday after the Chinese electric automaker posted a smaller-than-expected loss and sales surge.
The startup lost 0.42 yuan ($ 0.07) per share in the second quarter, less than its expected loss of 0.68 yuan, according to Refinitiv data. That was less than the 1.15 yuan per share loss recorded in the same period last year.
Meanwhile, revenue rose 127.2% year over year to 8.45 billion yuan ($ 1.31 billion), more than analysts estimated at 8.32 billion yuan.
Nio is forecasting third-quarter sales between 8.91 billion yuan and 9.63 billion yuan, an increase of around 96.9% to 112.8% over the same quarter of 2020.
The electric car maker said it shipped 21,896 vehicles within its own previously stated range in the second quarter. For the third quarter, Nio is forecasting deliveries of 23,000 to 25,000 vehicles.
“Uncertainties” in the supply chain
Due to the global shortage of chips, Nio and other electric car manufacturers are faced with headwinds that could put a strain on production. In China, a coronavirus flare-up could potentially affect sales.
With the global electric vehicle adoption reaching a tipping point, we believe it is imperative to accelerate new product launches in order to attract more premium smart EV offerings …
“The problem for Nio, for Tesla, for others, every car they make, they sell. It’s really production and chip shortages, and … that’s going to be an overhang for the entire EV (electric vehicle). space, “Daniel Ives, managing director of Wedbush Securities, told CNBC’s Squawk Box Asia on Thursday.
William Bin Li, CEO of Nio, said in a statement that the global supply chain “still faces uncertainties”. The company has worked “closely” with its partners to “improve the production capacity of the entire supply chain,” he said.
Nio faces increased competition from other electric vehicle startups in China, including Li Auto and Xpeng, as well as the established Tesla.
US-listed Nio delivered 7,931 vehicles in July, fewer than Li Auto and Nio.
New models next year
Nio, which makes the EC6, ES6 and ES8 SUVs, is also preparing to deliver its first sedan, the ET7, next year.
“With the global electric vehicle adoption reaching a tipping point, we believe it is imperative to accelerate new product launches in order to bring more world-class smart EV offerings with superior end-to-end services to the growing user base in the global marketplace,” said Li.
The company plans to deliver three new products over the next year, including the ET7, he added.
Read more about electric vehicles from CNBC Pro
Nio has tried to differentiate itself from the competition with its battery replacement service. Nio users can go to special service stations to exchange their empty battery for a fully charged one.
Ives said this is one of the reasons he’s bullish on Nios stocks.
“For Nio, the key to success really lies in battery technology. I think they have massive innovation on the horizon, ”said Ives.
“And I think this is one that, if we look at the next year or two, next to the stock, which I think is going to get massively higher, I think it can potentially double its market share.”
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