On Friday, Tesla Inc’s Chinese rival Nio Inc. (NYSE:NIO) informed investors to expect underwhelming first-quarter results.
What Happened: The Chinese electric vehicle manufacturer anticipates delivering up to 43,000 vehicles by March 31, with projected revenue of approximately 12.9 billion yuan ($1.8 billion), according to a report by Bloomberg. The market expected deliveries of 65,000 units and 17.8 billion yuan ($2.46 billion) in revenue.
Chief Financial Officer Stanley Qu emphasized the company’s commitment to enhancing profitability through cost reductions driven by technological advancements.
Despite over a decade in the market, Nio continues to face challenges in achieving full-year profitability, primarily due to high research and development expenses and significant operational costs.
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While Contemporary Amperex Technology Co. Ltd. recently agreed to invest up to 2.5 billion yuan in a battery-swapping network with Nio, consumer acceptance of this recharging method remains uncertain.
Nio has also received funding from strategic investors, including a 3.3 billion yuan ($455.22 million) investment from Hefei government-backed funds and a $2.94 billion capital injection from Abu Dhabi’s CYVN Holdings in 2023.
Why It Matters: To boost sales, Nio has introduced new brands, Onvo and Firefly, and is restructuring its operations. The company plans to launch nine new or revamped models this year, aiming to increase its gross margin.
CEO William Li aims for profitability by Q4 2025 and to double sales to around 440,000 vehicles this year.
The warning from Nio comes amid a competitive landscape in the electric vehicle sector. Earlier this month, Nio reported a miss on its fourth-quarter revenue estimates, despite a 15.2% year-over-year increase. The company also reported a larger-than-expected adjusted loss per share, highlighting ongoing financial challenges.
Nio holds a momentum rating of 56.47% and a growth rating of 81.50%, according to Benzinga’s Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Nio
