EV maker Nio on Tuesday reported 1% lower quarterly losses for the second quarter of the year as vehicle margin dropped to 10.3% — from 12.2% a year ago.
The company, which posted on Monday its best sales month ever with over 31,300 vehicles, reported a net loss of $685.2 million — the best result since the final three months of 2023 as the company continues trimming costs.
Net loss fell 5.8% year on year and by 23.5% when compared to the first quarter.
Late last week, at the Chengdu Auto Show, Nio‘s co-founder and president Lihong Qin said the third quarter of the year “is a turning point” for the EV maker.
The executive added that the company “now entered a stage of regathering momentum and rising again, having weathered the ‘storm’ cycle” warning that “it’s far from time to pop the champagne.”
As of the time of writing, US-listed Nio shares are trading 4% higher at $6.65 ahead of the company’s earnings conference call, where the CEO William Li and the CFO Stanley Qu are expected to detail the results.
The company said the decrease in vehicle margin was mainly due to “changes in product mix” as it the aversage selling price of the group lowered with the arrival of the sub-brands Onvo and Firefly.
Nio said the year over year decline was “partially offset by the decreased material cost per unit” while noting it”remained relatively stable” compared with the first quarter of the year.
The Shanghai-headquartered group posted a net loss of 4.99 billion yuan ($697.2 million) for the second quarter ended June 30, narrowing from 6.75 billion yuan in the first quarter but slightly better than 5.05 billion yuan a year earlier.
On an adjusted basis, the company reported a net loss of 4.13 billion yuan, down 34.3% from the first quarter and 9.0% wider than a year earlier.
Total revenues climbed 57.9% from the previous quarter to 19.0 billion yuan ($2.65 billion), marking a 9.0% year-on-year increase.
The jump was largely driven by the 25.6% year over year increase in EV deliveries. Between April and June, Nio delivered 72,056 vehicles globally.
For the third quarter, the company founded and led by William Li guided revenue to range between 21.812 billion ($3.045 billion) and 22.876 million ($3.193 billion).
The guidance comes as deliveries are expected to jump between 40.7% and 47.1% (to 87,000-91,000) in the July-September period.
However, due to the higher share of lower priced vehicles from the sub-brands, the revenue increase expected ranges between 16.8% to 22.5%.
Vehicle sales reached 16.1 billion yuan ($2.25 billion), up 62.3% sequentially and 2.9% higher than the same period in 2024.
Gross profit more than doubled quarter on quarter to 1.90 billion yuan ($264.9 million), rising 12.4% year on year.
Gross margin improved to 10.0% from 7.6% in the first quarter, though only slightly higher than 9.7% a year earlier.
Operating losses totaled 4.91 billion yuan ($685.2 million), narrowing 23.5% from the previous quarter but still down 5.8% from a year earlier. Adjusted operating loss stood at 4.04 billion yuan, a decline of 32.1% sequentially and 14.0% year on year.
The Shanghai-headquartered company ended June with 27.2 billion yuan ($3.8 billion) in cash and cash equivalents, restricted cash, short-term investments, and long-term deposits.
Nio founder and CEO William Li told employees last week the EV maker must achieve profitability in the fourth quarter, describing it as a decisive “battle we must win.”
At the internal meeting, Li reiterated the profitability target for the final quarter of the year, saying it remains the company’s most important milestone, according to local outlet LatePost.
The earnings conference call is scheduled to start at 8:00 AM Eastern Time.
