Despite achieving positive year-on-year growth in sales and revenue, NIO's financial data for 2023 did not improve and showed signs of accelerated deterioration.
On March 5th, NIO released its Q4 2023 report and full year financial report. In the fourth quarter of 2023, NIO's revenue was 17.1032 billion yuan, a year-on-year increase of 6.5%, and the annual revenue was 55.6179 billion yuan, a year-on-year increase of 12.9%. NIO's net loss for the fourth quarter of 2023 was 5.3677 billion yuan, a year-on-year decrease of 7.2%; The net loss in 2023 was 20.7198 billion yuan, a year-on-year increase of 43.5%. Research and development remains NIO's largest expense, with a research and development investment of 13.4314 billion yuan in 2023, a year-on-year increase of 23.9%.
It is worth noting that in 2023, NIO's gross profit margin was 9.5%, a decrease of 4.2 percentage points from 13.7% in 2022; The comprehensive gross profit margin is 5.5%, a decrease of about 5 percentage points from 10.4% in 2022. Over the past six years, NIO has incurred a total loss of over 86 billion yuan. In addition, as of December 31, 2023, the balance of NIO cash and cash equivalents, restricted cash, short-term investments, and long-term fixed deposits was RMB 57.3 billion; Current liabilities amounted to 57.798 billion yuan, an increase of 11.946 billion yuan compared to last year; The total liabilities were 88.787 billion yuan, an increase of 19.17 billion yuan from last year.
The sales volume remains the biggest bottleneck for NIO, but NIO Chairman and CEO Li Bin emphasized at the financial report that the NIO brand places more emphasis on gross profit margin and will not participate in price wars to exchange price for quantity.
"NIO will face competition from companies such as Tesla, startups, private enterprises, and so on. This competition is good for users, but it does pose some challenges for the enterprise. The ultimate winner will be the enterprise with stronger comprehensive capabilities," said Li Bin.
Based on the delivery guidelines for the first quarter of this year and the sales in the fourth quarter of last year, NIO has still not been able to shake off the title of "NIO 10000". Previously, Li Bin joked in a media interview that if NIO had a long-term monthly sales of 10000 vehicles, he and NIO CEO Qin Lihong would have to look for jobs. But to this day, except for achieving sales exceeding 20000 units in July 2023, most other months only have over 10000 units.
A person from the planning department of a car company told reporters that NIO's sales exceeded 20000 units in July last year, largely due to the price adjustment across the entire range in June; But with the internal competition of the domestic car market and the emergence of a series of models such as the Geely K7 and the Smart S7, the cost-effectiveness and competitiveness of NIO products have declined.
The second brand Alps project, which is about to be launched this year, has been entrusted with the responsibility of helping NIO achieve an increase in sales scale. The reporter learned that the Alps project will officially launch its brand in the second quarter of this year, release its first product in the third quarter, and achieve large-scale delivery in the fourth quarter. Li Bin said that the first Alpine product will benchmark against Tesla Model Y, and the second product will be an SUV product aimed at large families.
In addition, the products of the Alps project will share the battery swapping system with NIO's battery swapping partners such as Changan and Geely, and the NIO brand will monopolize a portion of the battery swapping network. In terms of channels, Li Bin said that he has already locked in some resources and aims to open 200 stores this year. He will reserve a certain amount of sales talent for the Alps project through NIO's system.
"The second brand is focused on the home market, launching competitive products for different numbers of households." Li Bin said that thanks to previous research and development investment and intelligent technology reuse, the products of the Alps project will have good cost competitiveness, and the cost of the first product can be 10% lower than Tesla Model Y.
In addition to the second brand Alps project, NIO's third brand Firefly project is planned to be launched in 2025. Li Bin stated that this brand is mainly aimed at markets worth over 100000 yuan.
It should be pointed out that the Alpine project will only be delivered in large quantities in the fourth quarter, and its contribution to this year's sales is limited. Li Bin stated that NIO improved its sales system and sales capacity last year. As the sales off-season passes, he hopes to return to the monthly sales level of 20000 vehicles as soon as possible.
Li Bin stated that in 2024, the NIO brand will focus on improving efficiency and expanding its presence in the lower tier market, promoting sales through the deployment of charging, swapping, and energy replenishment facilities in the lower tier market. Data shows that first tier cities, represented by the Yangtze River Delta, have contributed significantly to NIO's sales, with sales in first tier cities accounting for over 70%.
In terms of overseas markets, NIO, which will go global in 2022, will continue to slow down its pace. Li Bin stated that he will conduct lean operations in the five European countries he has already entered this year, and the new overseas market will be the United Arab Emirates. With the launch of the second and third brands, NIO can cover more price ranges and then target a larger market. In addition, NIO still chooses the full direct sales model in overseas markets. In the future, NIO will adopt some faster investment return methods based on the characteristics of overseas regional markets, including cooperation with local companies.