Nio reported fourth-quarter revenue that surpassed expectations, although it experienced a decline due to fewer vehicle deliveries. However, its gross margins fell slightly in the fourth quarter, missing analysts’ expectations.
According to its unaudited financial results, Nio recorded revenue of RMB 17.1 billion ($2.4 billion) in the fourth quarter of 2023, up 6.5 percent from the fourth quarter of 2022 but down 10.3 percent from the third quarter of 2023. Despite the decline, this figure exceeded the median Wall Street analyst estimate of RMB 16.8 billion in a Bloomberg survey and was above the upper end of its previous guidance range of RMB 16.08 billion to RMB 16.7 billion.
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Nio delivered 50,045 vehicles in the fourth quarter, surpassing the upper end of its previous guidance range of 47,000 to 49,000 vehicles. This marked a 24.95 percent year-on-year increase but a 9.72 percent decrease from the third quarter.
The company’s gross margin in the fourth quarter was 7.5 percent, below Wall Street analysts’ expectations of 10.2 percent. This figure was 3.9 percent in the fourth quarter of 2022 and 8.0 percent in the third quarter of 2023.
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The decline in gross margin from the third quarter of 2023 was primarily attributed to the decreased margin from the provision of power solutions resulting from an expanded power network, partially offset by higher vehicle margins, Nio stated. The company reported a vehicle margin of 11.9 percent in the fourth quarter of 2023, up from 11.0 percent in the third quarter and 6.8 percent in the same period last year.
Revenue from automotive sales in the fourth quarter was RMB 15.4 billion, up 4.6 percent year-on-year but down 11.3 percent from the third quarter. Cost of sales was RMB 15.8 billion, up 2.5 percent from the fourth quarter of 2022 and down 9.8 percent from the third quarter of 2023, mainly due to lower deliveries.
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Nio’s gross profit was RMB 1.28 billion in the fourth quarter, an increase of 105.7 percent from the fourth quarter of 2022 but a decrease of 16.0 percent from the third quarter of 2023. The company reported a net loss of RMB 5.37 billion in the fourth quarter of 2023, a decrease of 7.2 percent from the fourth quarter of 2022 and an increase of 17.8 percent from the third quarter of 2023.
Excluding share-based compensation expenses, non-GAAP adjusted net loss for the fourth quarter was RMB 4.8 billion, down 5.2 percent from the fourth quarter of 2022 and up 21.5 percent from the third quarter. Adjusted basic and diluted net loss per share were both RMB 2.81, compared to RMB 3.07 in the same period in 2022 and RMB 2.28 in the third quarter of 2023.
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Nio’s research and development expenses were RMB 3.97 billion in the fourth quarter of 2023, a decrease of 0.2 percent from the fourth quarter of 2022 and an increase of 30.7 percent from the third quarter of 2023. Excluding share-based compensation expenses, non-GAAP R&D expenses were RMB 3.6 billion, an increase of 1.8 percent from the fourth quarter of 2022 and an increase of 36.8 percent from the third quarter of 2023. The increase from the third quarter was mainly due to incremental design and development costs for new products and technologies, as well as increased personnel costs in research and development functions, Nio explained.
As of December 31, 2023, Nio’s cash and cash equivalents, restricted cash, short-term investments, and long-term deposits balance was RMB 57.3 billion.
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For the first quarter, Nio expects vehicle deliveries to be in the range of 31,000 to 33,000 units, implying a decrease of 0.1 percent to an increase of 6.3 percent from the same quarter of 2023. The company is guiding first-quarter revenue to be in the range of RMB 10.499 billion ($1.479 billion) to RMB 11.087 billion ($1.562 billion), a decrease of 1.7 percent to an increase of 3.8 percent from the same quarter of 2023. Considering that Nio delivered 10,055 vehicles in January and 8,132 in February, the guidance means it expects to deliver between 12,813 and 14,813 vehicles in March.
