Nio Q3 net loss widens to 4.1 billion yuan despite higher vehicle sales

CHINESE electric vehicle (EV) maker Nio reported on Thursday (Nov 10) a wider net loss of 4.1 billion yuan (S$801.4 million) during its third quarter, despite higher vehicle sales and total revenue.

The net loss for the 3 months ended Sept 30, 2022, was 44.9 per cent higher year-on-year and an increase of 50.9 per cent from the net loss it reported in Q2 FY2022.

The wider losses were posted despite stronger total revenue, which rose to 13 billion yuan, from 9.8 billion yuan in Q3 2021.

Vehicle sales grew 38.2 per cent in the third quarter of 2022 to 11.9 billion yuan, which was mainly attributed to higher deliveries as a result of a more diversified product mix offered.

Nio delivered some 31,607 vehicles in Q3 FY2022, which was a record-breaking quarterly delivery, chief executive William Bin Li noted. By comparison, the company delivered 25,059 vehicles in Q2 this year, and 24,439 vehicles in Q3 2021.

“We achieved solid top line growth in the third quarter of 2022 against a challenging market environment,” said Steven Wei Feng, chief financial officer of Nio. “We aim to consistently enhance the holistic user experience for our global user community by investing in core technology development as well as power network expansion, while continuously improving our operational execution and efficiency.”

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While Nio recorded higher revenue, the company’s cost of sales, was also higher than previous quarters, driven by higher delivery volume and higher battery cost per vehicle.

The higher costs of batteries also resulted in weaker vehicle margin for Q3 FY2022: declining to 16.4 per cent, from 18 per cent in the same period a year ago.

Nio’s gross profit fell 12.9 per cent on year to 1.7 billion yuan in Q3 FY2022

The company also incurred higher research and development expenses of 2.9 billion yuan during the third quarter, which was 146.8 per cent higher than the year-ago period.

Selling, general and administrative expenses were also up 48.6 per cent on year to 2.7 billion yuan.

Nio’s loss per share stood at 2.53 yuan for Q3 FY2022, higher than the 1.82 yuan per share loss in the year-ago period.

Looking ahead, Nio expects to deliver between 43,000 to 48,000 vehicles in the fourth quarter of this year, an increase of between 71.8 per cent and 91.7 per cent from Q4 2021.

Total revenue in Q4 2022 is expected to also rise a similar amount to be between 17.4 billion yuan and 19.2 billion yuan, the company said.

Singapore-listed shares of Nio closed at US$9.19 on Thursday before the earnings release, down US$1.14 or 11 per cent.