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NIO to Report Q2 Results Amidst Competition and Demand Concerns

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Andrew R. Michaud

• August 28, 2023

Chinese EV start-up NIO is scheduled to release its second-quarter financial results on Tuesday morning. Investors will be closely monitoring the numbers, while also considering factors such as competition, demand, pricing, and the overall Chinese economy.

Expectations and Forecasts

Wall Street analysts anticipate a per-share loss of approximately 33 cents from $1.3 billion in sales. FactSet, which aggregates five sets of estimates, predicts a slightly larger loss of 41 cents per share. Sales estimates align with the Wall Street consensus.

Comparing to the previous year, NIO's adjusted loss amounted to 19 cents per share and $1.5 billion in sales. The decline in sales can be attributed to lower delivery figures. In the second quarter of 2022, NIO delivered approximately 25,000 units, which decreased to about 23,500 units this year.

Anticipating a Rebound

April's introduction of the ES6 SUV has significantly contributed to NIO's sales growth. Demonstrated by July's delivery figure of 20,462 units, it surpassed the 10,000-unit milestone for that month. Consequently, investors are optimistic about a substantial rebound in the third quarter.

As NIO prepares to disclose its financial results, market observers will closely analyze the figures while reflecting on various aspects impacting the automotive industry.

Wall Street Anticipates Delivery of 50,000 Units for NIO in Q3

Analyzing July figures, Wall Street expects NIO to deliver approximately 50,000 units in the third quarter. This projection seems achievable and will provide insights into NIO's performance as well as EV demand in China.

Solid Growth in Battery-Electric Vehicle Demand in China

Data compiled by Citi analyst Jeff Chung reveals a substantial 25% year-over-year increase in battery-electric vehicle demand during the first seven months of this year. However, it is important to note that August sales are expected to experience a slight decline compared to the previous year.

Chinese EV Manufacturers Lower Prices Amidst Falling Sales

Faced with declining sales, several Chinese EV manufacturers, including Tesla (TSLA), have implemented price reductions on 25 different models during August.

Investor Concerns Arise as Sales Decline and Demand Weakens

The combination of decreasing sales and weakening demand has significantly impacted investor sentiment. Over the last 12 months, NIO shares have witnessed a decline of approximately 45%, with a more recent drop of about 28% over the past month. In comparison, the S&P 500 has recorded positive growth of about 10% over the last year, with a minor decrease of around 4% in the last month.

Conference Call to Address Key Concerns

Management will be hosting a conference call at 8 a.m. Eastern time to discuss the latest results. Analysts and investors will eagerly anticipate further details on various factors affecting NIO's performance, including delivery numbers, market demand, and the overall state of the Chinese economy.