China’s Accelerating Shift to EVs Helps Nio Post Narrower Loss
(Bloomberg) -- Chinese electric-vehicle maker Nio Inc. reported a narrower-than-estimated third-quarter loss, as strong demand from China overcame production snarls caused by the global chip shortage.
Nio posted an 835.3 million yuan ($130 million) loss in the three months ended Sept. 30, versus a 1.05 billion yuan shortfall a year earlier, the Shanghai-based company said in a statement. That compared with analyst estimates of an 863 million deficit, according to data compiled by Bloomberg. Revenue rose to 9.81 billion yuan, topping analyst estimates of 9.32 billion yuan.
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China’s rapid shift to electrification -- new-energy vehicle sales surged more than 140% in October from a year earlier -- is benefitting startups like Nio, and fellow China-based, U.S.-listed EV makers Xpeng Inc. and Li Auto Inc. Nio delivered 24,439 vehicles last quarter, doubling from a year earlier.
Monthly deliveries fell to just 3,667 vehicles in October as production lines were retooled for new models and to increase capacity, along with supply constraints. Nio forecast fourth-quarter deliveries of 23,500 to 25,500 vehicles and total revenue of 9.38 billion yuan to 10.1 billion yuan.
“Demand continues to be strong and our new orders reached a new record high in October ” founder and Chief Executive Officer William Li said in the statement. “Despite the continued supply chain volatilities, our teams and partners are working closely together to secure the supply and production for the fourth quarter.”
Having focused on SUVs since its launch, Nio is aiming at delivering its first sedan, the ET7, as soon as the first quarter of 2022. Nio will also launch two new models next year, while preparing to step into the mass market with a separate brand.
Still, it’s facing stiffer competition in its home market. Its nearest rival, Elon Musk’s Tesla Inc., has seen sales pick up in China -- now its second largest market -- and has set up a new R&D facility and data center in Shanghai, Nio’s home-base, to “bring products and services that are more in line with the needs of the Chinese consumer.”
Meanwhile, sales of Volkswagen AG’s electric ID series climbed to 12,734 last month, catching up with the peak deliveries of Nio, Xpeng and Li Auto within just six months of its launch.
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