China’s strangest electric car company: Covering in 141 cities, selling record but selling at a loss

Recently, China’s electric car company NIO has released its fourth-quarter financial report. It is noteworthy that although the number of electric vehicles delivered to customers continues to increase, the company’s losses are also piling up. .

After achieving a record number of electric vehicle deliveries in the third quarter of 2022, China’s leading electric vehicle maker has adjusted its fourth-quarter business targets due to the Covid-19 outbreak and other measures. epidemic prevention is tightened.

Instead of setting a target of 43,000 to 48,000 vehicles delivered to customers, NIO has adjusted its target to 38,500 to 39,500 electric vehicles delivered.

However, NIO set a record in the fourth quarter after adjustment, providing customers with 40,052 electric vehicles, an increase of 60% compared to the same period in 2021 and an increase of 26.7% compared to the previous quarter. Despite restrictions on the Covid-19 epidemic, people are more limited in going to car showrooms.

Explaining this outstanding sales growth, NIO said good sales from the ET5 and ET7 models were the reason. The company has stated in its financial report that the ET5 is a superior model compared to other similar models in the Chinese market. The proof is that the ET5 was the 2nd best-selling model in China in January among models in the $40,000-45,000 segment.

The takeaway here is that despite the record performance, in the first quarter of the year, NIO stock spooked investors with a massive sell-off.

Another concern is NIO’s vehicle margins. This rate reached 6.8% in the fourth quarter of 2022, much lower than the 20.9% in the fourth quarter of 2021. NIO said the reason for this drop came from factors such as inventory provision, depreciation of the facility and losses due to canceled purchase commitments.

As a result, NIO posted a net loss of 5,786.1 yuan ($839.8 million) in the fourth quarter of 2022. This loss increased to 169% over the same period in 2021 and 40.8% higher than in the third quarter of 2022.

NIO’s business is quite similar to other Chinese electric vehicle manufacturers. For example, XPeng also fell short of delivery expectations after Covid-related closures hindered the delivery of their vehicles to customers.

Regarding NIO, the electric vehicle maker recently launched the EC7 and ES8 SUVs at the event in December.

NIO EC7 is a large SUV equipped with the company’s second generation NT 2.0 technology platform with powerful performance (capable of accelerating from 0 to 100 km/h in 3.8 seconds), is NIO’s fastest SUV ever. EC7 deliveries are expected to begin in May 2023.

Meanwhile, the six-seat SUV model ES8 is designed to suit all needs such as carrying family, work or travel, ..

NIO currently has 375 showrooms in 141 cities. The company has installed 1,331 charging stations across its network. Mass production of the 3.0 charging station is expected to begin in April. In January, Nio also delivered its first EL7 electric SUV to early adopters in Europe.