^{Source: Predictions based on analysts’ consensus from Visible Alpha}

NIO Financial Results: Analysis

NIO Inc. (NIO) reported mixed financial results for Q2 FY 2022. The company posted a loss per share of 1.68 yuan ($0.24), larger than analysts estimated and four times bigger than the loss per share in the prior-year quarter. Revenue, however, beat expectations, rising 21.8% year over year (YOY) to 10.3 billion yuan. Although revenue topped analyst predictions, revenue grew at the slowest pace in the past nine quarters. NIO’s vehicle deliveries, which were reported at the beginning of July, exceeded analysts’ forecasts. Note that NIO shares referred to throughout this story represent NYSE-listed American depositary shares (ADS) with the ticker NIO.

NIO Vehicle Deliveries

Most of NIO’s revenue is generated through the sale of vehicles. NIO delivered a total of 25,059 vehicles in Q2 FY 2022, up 14.4% from the year-ago quarter. Total vehicle deliveries can be broken down into deliveries of models including: the ES8, the company’s six-seater or seven-seater flagship smart electric SUV; the ES6, the company’s five-seater high-performance smart electric SUV; the EC6, the company’s five-seater electric coupe SUV; and the ET7, the company’s smart electric sedan.

The number of vehicle deliveries provides an indication of the demand for NIO’s vehicles as well as the company’s ability to scale production. NIO has faced a number of supply chain issues this year, including challenges related to the global semiconductor shortage and ongoing COVID-19-related lockdowns across China.

NIO’s vehicle deliveries growth has slowed significantly in recent quarters. Two years ago, for Q2 FY 2020, the company delivered 10,331 vehicles. By FY 2021 that number had more than doubled to 21,896. But deliveries have plateaued at between 24,000 and 26,000 per quarter since Q3 FY 2021.

NIO Outlook and Stock Performance

NIO said it expects vehicle deliveries for Q3 FY 2022 to be between 31,000 and 33,000, an increase of between 26.8% and 35.0% YOY. This would mark a shift toward accelerating vehicle deliveries growth. Total revenues for Q3 FY 2022 are expected to be in the range of 12.8 billion yuan to 13.6 billion yuan, an increase of between 31,0% and 38.7% YOY.

NIO shares fell by about 3.8% in after-hours trading immediately following the release of the company’s earnings report. Overall, NIO stock has provided a 1-year trailing total return of -57.9% as of Sept. 7, behind the S&P 500’s total return of -13.5%.

NIO’s next earnings report (for Q3 FY 2022) is expected to be released on Nov. 8, 2022.