On the evening of December 5th, NIO (stock price of $7.32, market value of $13.019 billion) released its latest financial report, which showed that in the third quarter of 2023, the company achieved a revenue of approximately RMB 19.067 billion, a year-on-year increase of 46.6% and a month on month increase of 117.4%; The net loss was approximately 4.557 billion yuan, a year-on-year increase of 10.8% and a month on month decrease of 24.8%; Research and development expenditure reached 3.04 billion yuan, exceeding 3 billion yuan for four consecutive quarters.
NIO Financial Report
For the fourth quarter of this year, NIO expects its new car delivery volume to be between 47000 and 49000 units, a year-on-year increase of 17.3% to 22.3%; The expected revenue is between 16.079 billion to 16.701 billion yuan, with a year-on-year increase of 0.1% to 4%.
Li Bin, Chairman of NIO, stated during the financial report conference call that NIO has recently completed a comprehensive planning of the company's two-year operating plan to determine key goals, priorities, and action plans. At the same time, the company has identified opportunities for organizational optimization, cost reduction, and efficiency improvement. "We will continue to focus on advancing core technologies, developing key products, and enhancing sales and service capabilities." Li Bin also stated that NIO will launch a new flagship model at the NIO Day on December 23.
It is expected that the gross profit margin of the whole vehicle will reach 15% in the fourth quarter
According to the financial report, in the third quarter of 2023, NIO Automobile's sales revenue was 17.408.9 billion yuan, a month on month increase of 142.3% and a year-on-year increase of 45.9%. "The significant increase in the company's car sales is mainly due to the increase in car delivery volume," explained NIO.
Official data shows that NIO delivered approximately 55400 new cars in the third quarter of 2023, a year-on-year increase of 75.4%, setting a new quarterly delivery record.
NIO Financial Report
In the third quarter of 2023, with the launch and delivery of the all-new EC6, NIO completed a comprehensive switch of products based on the NT2.0 platform. At present, NIO has a total of 8 models built on the second-generation technology platform for simultaneous sales, with prices covering the price range of 300000 to 600000 yuan.
"Thanks to the increase in average selling price, continuous reduction in vehicle costs, and economies of scale, NIO's gross profit margin for vehicles increased to 11% in the third quarter of 2023," said Feng Wei, NIO's Chief Financial Officer.
The financial report shows that in the third quarter of 2023, NIO's automotive gross profit margin increased from 6.2% in the previous quarter to 11%, but it still shows a downward trend compared to 16.4% in the same period last year. "The gross profit margin of automobiles has increased compared to the second quarter of 2023, mainly due to changes in product portfolio and reduced promotions," explained NIO.
Affected by fluctuations in automotive gross profit margins, NIO's overall gross profit margin increased from 1% in the second quarter to 8% in the third quarter of 2023, compared to 13.3% in the same period last year. "The company's gross profit margin has decreased compared to the third quarter of 2022, mainly due to a decline in the automotive gross profit margin," explained NIO.
Faced with the ongoing "price war", Li Bin stated that NIO will not trade a decrease in gross profit margin or price for an increase in sales, as this is unhealthy in the long run. "The NIO brand will continue to maintain price stability, continuously increase gross profit margins, and increase sales by enhancing sales capabilities and improving efficiency." Li Bin predicts that the gross profit margin of NIO's vehicles will reach 15% in the fourth quarter of this year.
Independent production and manufacturing costs will decrease by 10%
"In the past few months, we have identified the company's goals, key success factors and priorities, action plans, and required resources for each business in the next two years, identified opportunities for organizational optimization, cost reduction, and efficiency improvement. For projects that cannot improve the company's financial performance in the next three years, we will reduce or postpone them." Li Bin admitted that the company's delay in the production of homemade batteries is based on this consideration. However, he also emphasized that NIO will continue to develop its own battery cells and packs, but will commission others to produce them.
It is reported that the NIO battery research and development team began to be formed in 2021. In June last year, Li Bin introduced that NIO currently has a battery related team of over 400 people who are deeply involved in the research and development of battery materials, battery cell and whole package design, battery management systems, manufacturing processes, and other related work, comprehensively establishing and enhancing the systematic research and industrialization capabilities of batteries. NIO's self-made battery will be installed in Alpine models in 2024.
Alps is a brand new sub brand of NIO targeting the mass market, also known as NIO's second brand. "NIO will open up its second brand battery pack and battery swapping station to its partners. The first vehicle of the second brand has recently completed the VB vehicle (development and verification prototype) trial production," said Li Bin.
At present, the 8 models on sale by NIO are all produced in two factories that NIO and JAC cooperate with. However, with NIO completing the acquisition of some factory assets of Jianghuai Automobile for nearly 3.2 billion yuan, it will break away from the label of "OEM" and achieve completely independent production and manufacturing.
Jianghuai Automobile Announcement
On the evening of December 5th, Jianghuai Automobile and NIO announced that NIO would acquire production equipment and assets from the first and second advanced manufacturing bases in Jianghuai, with a total price of approximately 3.16 billion yuan excluding taxes. Regarding the consideration behind the acquisition of assets from the Jianghuai factory to obtain independent production qualifications, Li Bin responded that from a manufacturing perspective, if NIO were to manufacture entirely independently, manufacturing costs would decrease by 10%.
In terms of battery swapping networks, Li Bin introduced that NIO is building two sets of battery swapping networks - NIO's dedicated network and shared network. Among them, the shared battery swapping network can be used by NIO, Alps, and other brands. "Next, the company will start building a shared battery swapping network." Li Bin said that NIO and Alps brand sales stores will not share, but some service networks will be shared.
In addition, Li Bin revealed that currently, NIO's charging pile business has basically achieved a break even point, and the possibility of independent financing by NIO Power (NIO Energy System) cannot be ruled out in the future.
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