Introduction:
On December 5th, NIO released its financial report for the third quarter of 2023: revenue of 19.07 billion yuan, a month on month increase of 117.4% and a year-on-year increase of 46.6%, reaching a historic high; The delivery volume was 55432 units, a month on month increase of 135.7% and a year-on-year increase of 75.4%, reaching a historic high; The gross profit margin of the entire vehicle was 11.0%, a significant increase compared to the previous period; Cash reserves amounted to 45.2 billion yuan, an increase of 13.7 billion yuan compared to the previous quarter; The net loss has significantly narrowed, with 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.
Overall, NIO demonstrated strong performance growth and good operational performance in the third quarter of 2023, unleashing its competitiveness and promising future prospects.
After the financial report was released, NIO's Hong Kong stock market achieved two consecutive gains. As of the close on December 6th Eastern Time, NIO closed up 4.31% at $7.75, with a two-day cumulative increase of 5.87%. NIO Hong Kong stocks closed up 2.11% at $60.45 on December 7th, with a cumulative increase of 7.09% after the financial report.
Three "highs" showcase broad prospects
The financial report shows that the total revenue for the third quarter was RMB 19.07 billion, of which vehicle sales revenue was RMB 17.41 billion and other sales revenue was RMB 1.66 billion. In the third quarter, automobile sales revenue achieved significant growth year-on-year and month on month, recording 45.9% and 142.3% respectively, mainly due to the increase in automobile delivery volume. In the third quarter, approximately 55400 new cars were delivered, a year-on-year increase of 75.4% and a month on month increase of 135.7%, setting a new record for quarterly delivery.
Meanwhile, in the third quarter, NIO ranked first in the electric vehicle market in China with an average transaction price of over 300000 yuan, with a market share of over 45%. Thanks to the comprehensive switching of the NT2 platform product matrix, as well as the continuous expansion of sales network, infrastructure network, and service network, NIO's market share in the high-end intelligent electric vehicle market has been further expanded.
According to other data, from January to October 2023, NIO achieved a market share of 60.6% in the high-end pure electric market with an average transaction price of over 300000 yuan, and a sales growth rate of 40.2%, demonstrating significant industry advantages. Analysts point out that NIO's sales performance since the second half of the year can be said to be extremely valuable, while adhering to the principle of not engaging in price wars and maintaining basic stability in the pricing system.
In addition, thanks to the significant increase in delivery volume and measures such as cost reduction and efficiency improvement, the gross profit margin of NIO vehicles returned to double digits in the third quarter, reaching 11%, with a significant increase compared to the second quarter. This gross profit margin level is leading among pure electric vehicle enterprises in China.
Li Bin, founder, chairman, and CEO of NIO, said, "We have recently completed a comprehensive plan for the company's two-year operational plan to determine key goals, priorities, and action plans. At the same time, we have 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."
Further unleash competitiveness
NIO's high transaction volume and sales volume are closely related to its strong research and development capabilities and technological innovation capabilities. The data shows that NIO's research and development investment and number of patents are the highest among new forces. Since 2016, NIO has invested nearly 40 billion yuan in research and development, making it the company with the highest R&D investment among new forces. As of the end of October 2023, NIO has a total of approximately 7600 pending and authorized patents worldwide, far exceeding other new energy brands.
On September 21st, NIO showcased its 12 full stack technologies and actions for intelligent electric vehicles to the public for the first time on Innovation Technology Day, and the "NIO Technology Full Stack" was fully presented. At the same time, NIO has also released a series of achievements, including the first full vehicle operating system in China, Tianshu SkyOS, and the industry's first self-developed and mass-produced LiDAR main control chip, Yang Jian, demonstrating NIO's systematic research and development capabilities with industry advantages.
As the world's first intelligent electric vehicle brand to complete vertical switching of technology platforms, NIO currently has core technologies covering various sectors of intelligent electric vehicle manufacturing business, with multiple technological achievements and systematic research and development capabilities highlighting industry advantages. In September this year, with the official launch and delivery of the all-new EC6, it entered a strong product cycle. At the NIO Day 2023 held on December 23, NIO will release a brand new flagship model, which will become a new benchmark for NIO's technological innovation.
Adhering to long-term principles, valuing technological accumulation, continuously increasing research and development investment, and promoting the transformation of technology into products, to bring users higher quality products and a more comfortable driving experience, are the core competitiveness of NIO.
The battery swapping system welcomes favorable conditions
Infrastructure construction is a major challenge for the development of tram enterprises and a key factor in ensuring long-term development. NIO has always been committed to the construction of infrastructure systems such as charging piles and charging and swapping stations. As of December 5th, NIO has accumulated 2226 battery swapping stations, 3492 charging stations, 20479 charging stations, and connected over 1.46 million third-party charging stations worldwide.
After more than five years of operation, NIO's charging business has basically achieved a break even point, and its battery swapping business has also developed the ability to open up to the outside world. Next year, NIO will start building a shared battery swapping network, which will form two types of battery swapping station network systems: dedicated network and shared network. NIO users can use the shared battery swapping network.
Li Bin, founder, chairman, and CEO of NIO, said, "We have already signed two contracts, and a few are still in negotiations. They should also see the advantages of battery swapping from the perspective of user interests. We will open up the battery packs and swapping stations of mass market brands to our partners, and they will develop their models based on the battery packs. They need to modify the chassis, which will take some time, but not too long."
It is reported that NIO has signed cooperation agreements with Geely and Changan for battery swapping, and will conduct comprehensive cooperation in multiple fields such as battery swapping standards, battery swapping technology, battery swapping service network construction and operation, research and development and customization of battery swapping models, battery asset management and operation.
In Li Bin's view, the battery swapping business is a sustainable and profitable business in the long run. In 2024, the high-end market will accelerate its transition to the pure electric market. The battery swapping system will move from private domain exclusive to public service sector, further expanding NIO's business scope and revenue capacity. He also stated that there are already investors interested in NIO Power's independent financing, and the possibility of NIO Power's independent financing cannot be ruled out in the future.
Conclusion:
On the day of the release of NIO's third quarter report, Jianghuai Automobile announced that the company had received a project "Bidding Result Notice" provided by Anhui Provincial Property Rights Trading Center Co., Ltd. NIO became the transferee of the first and third asset packages, with a total transaction price of 3.158 billion yuan; Hefei Hengchuang became the transferee of the second package of assets, with a transaction price of 1.418 billion yuan. Industry insiders believe that this means that NIO, which has been "making cars" for ten years, has finally obtained independent car manufacturing qualifications, and has rid itself of contract manufacturing, "reducing burden and increasing energy".
In addition, in July this year, Abu Dhabi investment firm CYVN completed a strategic investment of approximately 1.1 billion US dollars through targeted issuance of new shares and transfer of old shares; From September to October, NIO successfully issued a total of $1.15 billion in convertible senior bonds. Analysts have pointed out that the receipt of these two funds has significantly strengthened NIO's cash reserves.
It is reported that NIO delivered a total of 32000 new cars in October and November, a year-on-year increase of 32.2%. The total delivery volume for the fourth quarter is expected to be between 47000 and 49000, with a year-on-year increase of 17.3% to 22.3%; At the same time, the expected total revenue is 16.079 billion to 16.701 billion yuan, a year-on-year increase of approximately 0.1% to 4.0%. Benefiting from the decrease in component costs, lithium prices, and improved efficiency, it is expected that the gross profit margin of the entire vehicle will reach 15% in the fourth quarter. Based on the third quarter report, it can be seen that NIO has reached a turning point of positive performance development. After the financial report was released, NIO's stock price rose by over 8% at one point.
Li Bin, founder, chairman, and CEO of NIO, said on the financial report conference call, "The next two years will be the most competitive stage in the automotive industry's transformation period. We have sorted out and adjusted the company's key goals, priorities, and action plans, focusing on efficient execution and system capability improvement to ensure continuous investment in key technologies and sufficient sales capabilities to cope with fierce market competition. We are full of confidence in NIO's long-term competitiveness in the intelligent electric vehicle industry."