NIO’s last quarter and 2019 financial results show the EV startup is focused on increasing efficiency and reducing costs.
If there has been one Chinese EV startup to show resilience and unbridled fan enthusiasm, NIO certainly has. The last 2019 quarter financial results point to a 54.8% revenue increase compared to Q3 2018 with deliveries up by 81.2% YoY. Total 2019 revenue reached RMB7,824.9 million (US$1,124.0 million), also up by 58% YoY.
NIO, the Chinese comeback kid
NIO could be called the comeback kid. After a particularly trying 2019 for the Chinese domestic EV market, NIO has been continuously improving its situation.
Specifically, its complete report shows its EV deliveries were 8,224 in the fourth quarter of 2019. It was broken down into 6,824 ES6s and 1,400 ES8s, compared to 4,799 vehicles in the third quarter of 2019. Overall EV deliveries were 20,565 in 2019, compared with 11,348 vehicles delivered in 2018.
Deliveries for 2019 Q4: 8,224 compared to 7,980 for 2018 Q4
2019 Q3: 4,799 compared to 3,268 for 2018 Q3
2019 Q2: 3,553 compared to 100 2018 Q2
2019 Q1: 3,989 no data for 2018 Q1
2019 Full Year: 20,565 compared to 11,348 in 2018.
The main highlights are NIO’s EV sales were RMB2,683.9 million (US$385.5 million) in the fourth quarter of 2019. This is a 54.8% increase from the third quarter of 2019. It is a decrease of 20.6% from the same quarter of 2018 before China’s incentives were taken away.
Total revenues were up by 55.1% from the third quarter of 2019 and a decrease of 17.1% from the same quarter of 2018. The company’s reported revenues are RMB2,848.3 million (US$409.1 million) in the fourth quarter of 2019. Its gross margin was negative, shrinking to 8.9% compared to its previous 12.1% in the third quarter of 2019. It managed 0.4% in the same quarter of 2018.
Digging a little deeper, NIO’s loss from operations was RMB2,826.2 million (US$406.0 million) in the fourth quarter of 2019. This is an increase of 17.3% from the third quarter of 2019 but a decrease of 18.0% from the same quarter of 2018. Its net loss was RMB2,864.6 million (US$411.5 million) in the fourth quarter of 2019. This was a predictable increase of 13.6% from the third quarter of 2019. It was a decrease of 18.2% from the same quarter of 2018.
The very colorful William Bin Li, founder, chairman, and chief executive officer of NIO said:
“We delivered, on a combined basis, 8,224 ES8 and ES6 vehicles in the fourth quarter of 2019, representing a 71.4% sequential increase from the prior quarter. Cumulative deliveries of ES8 and ES6 reached 20,565 in 2019, representing an 81.2% increase from 2018…”
According to Wei Feng, NIO’s chief financial officer:
“We are pleased with our financial performance in the fourth quarter of 2019, with the top line growing 55.1% from the previous quarter. We have put great efforts to optimize our organizations and to improve operation efficiency, which resulted in certain one-off expenses in the fourth quarter. However, we believe that these efforts will significantly reduce our operating expenses and improve our cash flows in 2020 and beyond. We will continue to improve operation efficiency in all business fronts to bring positive changes to the performance of our margins in the future.
“Additionally, we made several private placements of convertible notes in February and March 2020, in an aggregate principal amount of US$435 million, which supported our daily operations and business development. On February 25, 2020, we entered into a collaboration framework agreement with the municipal government of Hefei, Anhui Province, who expects to provide resources and funding support for NIO to establish NIO China headquarters in Hefei for our long-term growth. The parties are working on the legally binding definitive documents to be signed.”
Li went on to say that NIO now has 34,218 NIO users across 296 Chinese cities as of the end of February 2020. He reported that their ES6 ranked No.1 in electric SUV sales in China for the fifth consecutive month since October 2019.
A powerful community
Speaking on NIO’s unique community, Li said that NIO has 22 NIO Houses and 62 NIO Spaces spread out over 59 cities in China. I visited the NIO House in Shenzhen and was impressed by its level of activity. A playroom for kids is available with personnel while adults can lounge, sipping on terrific espressos and teas, chatting the day away. The Chinese seem to enjoy leaving their homes to congregate.
Next, we’ll have to keep our on the new EC6 already being produced.
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