Nio, the Chinese electric vehicle (EV) maker, reported third-quarter revenue below analysts’ expectations but achieved record vehicle deliveries and an improvement in gross margins. The company’s revenue reached RMB 18.67 billion ($2.66 billion), down 2.1% year-on-year and missing the guidance range of RMB 19.11 billion to RMB 19.67 billion.
Nio delivered a record 61,855 vehicles in the third quarter, an 11.6% increase from a year earlier and up 7.8% from the previous quarter. The company attributed its year-on-year revenue dip to lower average selling prices due to changes in its product mix, partially offset by higher deliveries. For the fourth quarter, Nio expects to deliver between 72,000 and 75,000 vehicles, reflecting growth of up to 49.9% year-on-year.
Gross margin improved to 10.7% in the quarter, the highest since Q3 2022, driven by higher vehicle margins and strong performance in accessory sales. “Ongoing cost optimization helped vehicle gross margin improve to 13.1% in the third quarter of 2024,” said Nio CFO Stanley Qu. He highlighted another milestone for the company: “The company’s free cash flow turned positive in the quarter as sales volumes continued to grow and gross margin steadily improved.”
Despite these achievements, Nio posted a net loss of RMB 5.06 billion, up 11% from a year ago. Excluding equity incentive expenses, the adjusted net loss stood at RMB 4.41 billion, a 2.7% improvement compared to the second quarter. The company reported higher research and development (R&D) expenses, reaching RMB 3.32 billion, reflecting investments in innovation and talent acquisition.
Qu also outlined Nio’s forward strategy, emphasizing the company’s readiness to capitalize on new opportunities. “Starting next year, our three brands are poised to embark on a robust product cycle, projected to elevate the Company’s sales volume to new heights,” he said. “We expect this momentum will drive continued improvements in the Company’s operational and financial performance.”
With a cash reserve of RMB 42.2 billion as of September 30, 2024, Nio is well-positioned to navigate challenges and execute its ambitious plans for growth.
