Nio Losses Could Widen After Deliveries Missed Initial Guidance

Key Takeaways

  • Nio is expected to post an adjusted loss per share of 1.38 yuan ($0.20) for Q4 2022, compared with a 1.07-yuan loss a year earlier.
  • Nio’s revenue likely grew by more than 75% to 17.5 billion yuan ($2.5 billion).
  • Nio’s Q4 vehicle deliveries were just over 40,000, below initial estimates but above updated guidance it released near the end of the quarter.
  • COVID-related lockdowns and supply disruptions hindered business at the end of the year.

Nio Inc. (NIO), the Chinese firm that’s among the top electric vehicle (EV) makers worldwide, will probably say its loss widened even as revenue surged to a record amid COVID-related delivery delays and lingering supply chain issues.

Nio is likely to say when it reports fourth quarter 2022 earnings before markets open on March 1, that its net loss widened to 3.1 billion Chinese yuan (about $448 million) from 2.2 billion yuan a year prior, according to estimates from Visible Alpha. Adjusted losses per share could widen to 1.38 yuan ($0.20) from 1.07 yuan, while revenue is expected to surge more than 75% to 17.5 billion yuan ($2.5 billion).

Nio faced headwinds including a difficult global economy that dampened consumer sentiment, strict COVID lockdowns that only ended in late 2022, and a phase-out of Chinese government subsidies. Still, the market for EVs in China is significant—accounting for about two-thirds of global EV sales last year—and growing.

In late December Nio reduced its estimates for vehicles delivered in the final months of the year to about 39,000 after previously projecting a figure as high as 48,000. The company cited COVID-related supply chain issues as a main factor. Nio said in January that it delivered about 40,000 vehicles in the fourth quarter, ahead of revised estimates but below prior guidance.

Nio shares plunged late in 2022 and have fallen by 59% in the last year, compared with a drop of about 19% for the S&P 500 Consumer Discretionary Index.

Source: TradingView.
Nio Key Stats
  Estimate for Q4 FY 2022 Actual for Q4 FY 2021 Actual for Q4 FY 2020
Adjusted Earnings Per Share (Yuan) -1.38 -1.07 -0.93
Revenue (Yuan Billion) 17.5 9.9 6.6

Source: Predictions based on analysts’ consensus from Visible Alpha

The Key Metric: Cars Delivered

A car company is only as good as the number of autos it can make and deliver to its customers. something that Tesla has struggled with the past. While Nio has faced some challenges from factors beyond its control, its quarterly results will reveal whether overdelivering after cutting guidance is a measure of strength or mere window dressing. The clock is ticking for the EV-maker in an already crowded Chinese market.