Categories Analysis, Industrials

Nio (NIO): Higher investment in autonomous technology to be key priority

Nio is rigorously testing its Navigate on Pilot (NOP) feature which it plans to release within this year

Shares of Nio Inc. (NYSE: NIO) were up 3% in afternoon hours on Wednesday, a day after the company reported strong results for the second quarter of 2020. The stock has jumped 232% since the beginning of the year and 289% over the past three months.

Nio saw an increase of 146.5% year-over-year in both vehicle sales and total revenues for the second quarter. Vehicle sales accounted for 94% of total revenues and the increase was mainly attributable to the sales of the ES6 which began deliveries in late June 2019. Other sales jumped nearly 148% mainly due to higher revenues from the installation of home chargers, service and energy package subscriptions and sales of accessories.

Deliveries

Nio delivered a total of 10,331 vehicles in the second quarter, marking a new record, and reflecting a growth of nearly 191% year-over-year and over 169% sequentially. In April, deliveries rose around 181% year-over-over to 3,155 vehicles. This number increased to 3,436 vehicles in May, gaining 215.5% year-over-year. In June, deliveries totaled 3,740 vehicles, rising 179% year-over-year.

In July, deliveries totaled 3,533 vehicles, reflecting an increase of 322.1% year-over-year. Cumulative deliveries in the first seven months of 2020 rose 111.3% over the same period in 2019.

Autonomous driving

On its quarterly conference call, Nio mentioned that one of its key priorities is increasing its investment in the autonomous driving technology. The company is working on new products and technologies that will help it maintain competitiveness in the market.

Currently the company is looking to maintain its overall R&D investment within RMB3 billion every year but it plans to increase its investment in autonomous driving at a normal pace. Nio has a team of around 200 people focusing on autonomous driving technology development which accounts for a fixed part of R&D costs.

Nio is rigorously testing its Navigate on Pilot (NOP) feature which it plans to release within this year. In terms of take rates, the Founder’s Edition, which has NOP as a standard feature, accounted for around 10,000 units. At present, the take rate of the NIO Pilot is around 25%. The company has also accelerated the development of the NIO Technology Platform 2.0, which is its next-generation autonomous driving technology.

Battery-as-a-Service

Nio has made progress on its Battery-as-a-Service business model, which involves the separation of the battery from the vehicle. The company has completed the necessary product communication and certification to sell vehicles and batteries separately.

The first vehicle under the BAAS model has completed the validation process in insurance purchase, loan application and license plate registration. The company is in the final stages of work for the official offering of the BAAS solution which will be released in the third quarter.

Nio is preparing for the setup of the Battery Asset Management Company, which will own the battery assets and lease it out to users, but the company will not be the main stakeholder in the venture.  

Outlook

Nio expects total deliveries to range between 11,000 and 11,500 vehicles for the third quarter, reflecting an increase of around 129.2% to 139.6% year-over-year. Total revenues are expected to increase 120.4-129.3% year-over-year to $572.9-596.2 million.

Click here to read the full transcript of Nio Q2 2020 earnings conference call

Most Popular

Nike (NKE) swings to profit in Q4 on 96% revenue growth; results beat

Nike, Inc. (NYSE: NKE) reported a profit for the fourth quarter of 2021, compared to a loss last year, as revenues of the sneaker giant surged 96% aided by strong

FDX Earnings: All you need to know about FedEx’s Q4 2021 earnings results

FedEx Corporation (NYSE: FDX) reported fourth quarter 2021 earnings results today. Total revenues increased to $22.6 billion from $17.4 billion in the same period a year ago. The company reported

IPO News: Torrid Holdings is set to go public next week, here’s what to know

The retail industry undergoes various shifts from time to time as the needs and preferences of customers keep on changing. In today’s world, where concepts like female empowerment and body

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top