NIO’s Q2 2023 revenues shrink both YoY, QoQ

Shanghai (Gasgoo)- NIO Inc., a prominent contender in China's premium smart electric vehicle (EV) market, on Tuesday unveiled its unaudited financial outcomes for the second quarter of 2023 (Q2 2023).

In Q2 2023, NIO's total revenues amounted to 8,771.7 million yuan (US$1,209.7 million), indicating a decline of 14.8% from the same period in 2022 and a drop of 17.8% from the first quarter of 2023 (Q1 2023).

Within the same timeframe, its vehicle sales reached 7,185.2 million yuan (US$990.9 million), reflecting a decrease of 24.9% compared to Q2 2022 and a 22.1% decrease relative to Q1 2023. NIO said the year-on-year (YoY) decrease in vehicle sales primarily resulted from a reduced average selling price stemming from a higher proportion of ET5 and 75 kWh standard-range battery pack deliveries, in addition to a decrease in delivery volume. Conversely, the quarter-on-quarter (QoQ) decrease in vehicle sales can be mainly attributed to a decline in delivery volume.

Notably, NIO delivered a total of 23,520 vehicles in Q2 2023, encompassing 10,492 SUVs and 13,028 sedans, resulting in a 6.1% dip from Q2 2022 and a 24.2% decline from Q1 2023.

For the Apr.-Jun. period of 2023, NIO's gross margin stood at 1.0%, a notable contrast to the 13.0% recorded in the same period of 2022, and the 1.5% for the previous quarter. The YoY decline in gross margin was primarily linked to a reduction in vehicle margin, and the QoQ reduction, on the other hand, was largely influenced by the upswing in sales of used cars with lower profit margins.

The company’s Q2 2023 vehicle margin reached 6.2%, contrasting with the 16.7% in the same quarter of 2022 and the 5.1% in Q1 2023. The YoY reduction in vehicle margin can be primarily ascribed to shifts in the product mix, partially mitigated by the lower cost per unit of batteries. In addition, the QoQ growth in vehicle margin can be largely attributed to the reduction in promotional discounts for the earlier generation models such as the ES8, the ES6, and the EC6.

In Q2 2023, the company’s drive for innovation was evident as research and development (R&D) expenditures reached 3,344.6 million yuan (US$461.2 million), representing a substantial 55.6% surge compared to the same period in 2022 and an increase of 8.7% from the previous quarter.

When excluding share-based compensation expenses, the non-GAAP R&D expenses amounted to 2,942.9 million yuan (US$405.8 million) in Q2 2023. This figure demonstrated a remarkable 57.1% jump from Q2 2022 and an 8.5% increase from Q1 2023.

The noteworthy YoY and QoQ growth in R&D costs can both be largely attributed to two factors. Firstly, increased personnel costs within the R&D functions, coupled with augmented share-based compensation expenses recognized in Q2 2023, contributed to this upward trajectory. Secondly, the commitment to innovation was reinforced by incremental design and development expenses incurred for pioneering new products and cutting-edge technologies.

NIO projects a robust performance in the third quarter of 2023 (Q3 2023), with anticipated vehicle deliveries ranging between 55,000 and 57,000 units, a surge of approximately 74.0% to 80.3% compared to the same quarter in 2022. The company also expects total revenues to reach between 18,898 million yuan (US$2,606 million) and 19,520 million yuan (US$2,692 million) in Q3, showing a 45.3% to 50.1% YoY rise.