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NIO Q3 FY24

AInvestWednesday, Dec 4, 2024 3:13 am ET
2min read

NIO's operating revenue in September 2024 was RMB18.674 billion, a decrease of about 2.74% from RMB19.067 billion in the same period of 2023. This change indicates that the company faces certain challenges in revenue, especially in the context of intensified competition and changing market conditions.

## Key Financial Data

1. Operating Revenue: RMB18.674 billion, a 2.74% YoY decrease.

2. Delivery Volume: The delivery volume in Q3 2024 reached a record high of 61,900 units.

3. Gross Margin: The gross margin of vehicles improved to 13.1%.

4. Net Loss: The net loss in Q2 was RMB5.046 billion, a YoY decrease of 16.7%.

5. Cash Flow: Free cash flow has turned positive, with cash reserves increasing to RMB42.2 billion.

## Industry Comparison

1. Overall Industry Analysis:

- The overall EV market faced challenges in 2024, with many brands experiencing sluggish revenue growth due to market saturation and changes in consumer preferences. Industry reports show that overall EV sales declined in 2024, particularly in the high-end market, where competitors' price wars led to a decrease in overall gross margin.

- According to CPCA, the retail volume of new energy passenger vehicles in China from January to November 2024 was 867,000 units, up 68% YoY and 7% MoM. It is expected that the annual sales of new energy vehicles will reach 12.5 million units, up more than 30% YoY (source).

2. Peer Evaluation Analysis:

- Compared to companies like Tesla, NIO's revenue decline was relatively small. Tesla's revenue was also affected during the same period, but its market share is higher, resulting in a relatively stable overall performance. NIO needs to focus on its positioning and brand recognition in the high-end EV market to maintain competitiveness.

- Despite the revenue decline, NIO performed well in terms of delivery volume and gross margin, showing resilience.

## Conclusion

NIO's revenue decline, but the improvement in delivery volume and gross margin indicates that it still possesses competitiveness in production and sales. Intensified competition and macroeconomic fluctuations are the main factors affecting its revenue. Future sales strategies need to be flexible to respond to market changes to maintain growth.

## Opportunities

1. New Model Launch: NIO will launch its flagship model ET9 in December 2024, which may attract customers in the high-end market and boost market share (source).

2. Policy Support: Government support policies for EVs will continue to drive market demand, especially in the promotion of new energy vehicles.

3. Market Expansion: Through the price-volume strategy, NIO may stimulate sales and increase market share (source).

4. Financial Stability: The positive free cash flow and increased cash reserves support the company's future investment and expansion (source).

## Risks

1. Competition: The intensified competition in the EV market, especially from strong brands like Tesla, may affect NIO's sales.

2. Production Capacity Limit: NIO may face production capacity bottlenecks during its rapid expansion, unable to meet market demand.

3. Macroeconomic Fluctuations: Uncertainties in the global economy and supply chain issues may affect the company's production costs and sales capabilities.

4. Brand Recognition: NIO needs to further enhance its brand recognition in the high-end EV market to maintain competitiveness.


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