Chinese EV maker Nio widens Q2 loss to 2.7b yuan on higher costs

HIGHER expenses, including for research and development, weighed on the latest performance of Chinese electric carmaker Nio, with the company widening its net loss for Q2 ended June to 2.7 billion yuan (S$545 million), from 659.3 million yuan the year before.

Revenue for the quarter rose 21.8 per cent to 10.3 billion yuan, with vehicle sales up 21 per cent to 9.6 billion yuan. This came as vehicle deliveries rose 14.4 per cent to 25,059, of which 9,914 were of the ES6 model.

The increase in vehicle deliveries came despite pandemic-related challenges, said William Bin Li, Nio's founder, chairman and CEO, in the company's earnings statement on Wednesday (Sept 7).

However, Nio's gross profit fell 14.8 per cent to 1.3 billion yuan, weighed by a rise in cost of sales. Its bottomline was further weighed by heavier R&D costs, which rose 143.2 per cent to 2.1 billion yuan, as well as higher selling, general and administrative expenses.

Nevertheless, for H1, the company narrowed its net loss to 4.6 billion yuan, from 5.5 billion yuan the year prior. This came on the back of a 23 per cent rise in revenue to 20.2 billion yuan.

Looking ahead, H2 "is a critical period for Nio to scale up the production and delivery of multiple new products", said Li.

"The ES7, our first mid-large five-seater smart electric SUV based on Nio Technology 2.0, has become a new favourite of the market… We witnessed a robust order inflow for the ES7 and started its deliveries at scale in August.

"We also look forward to starting the mass production and delivery of the ET5 in late September," he said, adding that Nio looks to attract a broader user base.

Singapore-listed shares of Nio closed at US$17.40 on Wednesday before the earnings release, down US$0.38 or 2.1 per cent.

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes