NIO stock slides despite expected surge in Q2 EV deliveries

One of China’s brightest electric vehicle startups, NIO (NIO), reported a wider-than-expected Q1 loss. Although NIO expects EV deliveries to more than double in Q2, its stock continues sliding.

NIO reports Q1 2024 earnings results

NIO delivered 30,053 vehicles in the first three months of 2024. Of them, 17,809 were electric SUVs, while 12,244 were electric sedans.

Although NIO crossed the 30K mark, deliveries fell 3.2% year-over-year (YOY) and 40% from Q4 2023 (50,045). As a result, NIO’s revenue fell 42% from the previous quarter to $1,372 million (RMB 9,908.6 million).

NIO posted a higher Q1 net loss than expected at $718.1 million (RMB 5,184.6 million). That’s up 9% YOY but down 3.4% from the $751.48 million (RMB 5,367.7 million) Q4 2023 net loss.

The EV maker said lower Q1 EV deliveries were expected earlier this year after cutting guidance from 31,000 to 33,000 to 30,000. NIO ended up delivering just over 30K vehicles in Q1.

Despite missing guidance, the report had a few bright spots. For one, NIO’s margins are improving from last year. NIO’s vehicle margins reached 9.2%, up from 5.1% in the same period last year.

Gross margins also improved to 4.9% from 1.5% in Q1 2023. However, both figures were down compared to last quarter.

NIO expects Q2 EV deliveries will more than double

Despite the first quarter miss, NIO expects things to pick up. NIO projects EV deliveries will surge to between 54,000 and 56,000 in Q2, representing 130% to 138% YOY growth.

Following the new 2024 ET7 launched in April (with a massive 150 kWh semi-solid state battery), NIO’s lineup is now completely refreshed. NIO expects the ET7 will rival luxury automakers like BMW, Audi, and Mercedes-Benz.

NIO’s lineup now includes the refreshed 2024 ET5, ET5T, EC6, ES6, EC7, ET7, and ES8 as it enters Q2.

NIO also revealed its new Onvo mass-market brand last month. The first vehicle, the Onvo L60 electric SUV, will compete with Tesla’s Model Y, NIO confirmed on its earnings call with investors.

Starting at just $30,500 (219,900 yuan), NIO’s new EV undercuts Tesla’s top seller, which starts at 249,900 yuan ($34,600) in China.

Several analysts believe the new electric SUV could boost sales to over 20,000 per month. Deutsche Bank analyst Wang Bin’s team sent a letter to investors saying, “We think Nio’s expectation of monthly >20,000 unit delivery is achievable with boost from Onvo.”

Next year, NIO will launch its second vehicle under the Onvo brand, a large electric SUV for bigger families. NIO said on its earnings call that more Onvo EVs are in the pipeline.

NIO sees a good opportunity for growth in the segment, with a market size of around four million. Meanwhile, its third “Firefly” brand is coming soon as development progresses.

NIO already announced a record-breaking May, with 20,544 vehicles delivered, up 234% from last year. With 66,217 vehicles handed over so far in 2024 (As of May 31), NIO’s EV deliveries are up 51% YOY.

President and co-founder Qin Lihong confirmed NIO is building its third plant this week as the existing two can no longer keep up with demand.

Lihong told Blue Whale News (via CnEVPost) current production had reached its single-shift capacity, adding, “NIO does not have an overcapacity problem.”

Despite the higher expectations, NIO stock is down nearly 8% following its Q1 2024 earnings release. NIO shares are down over 40% in 2024 and over 90% from their ATHs in February 2021.

What do you guys think will NIO pick it up in Q2 with new EVs hitting the market? Let us know in the comments.