Categories Analysis, Industrials

Nio (NIO) to strengthen its swap-and-charge network ahead of new launches next year

For the third quarter of 2021, total revenues are expected to range between $1.38 billion and $1.49 billion

Shares of Nio Inc. (NYSE: NIO) were down 2.5% during morning trade on Thursday despite the company delivering better-than-expected earnings results for the second quarter of 2021 a day ago. The stock has gained 37% over the past three months.

Quarterly numbers

Revenues jumped 127% year-over-year to $1.30 billion in Q2 beating market estimates. Vehicle sales more than doubled YoY to $1.22 billion driven by higher deliveries.

Net loss attributable to shareholders narrowed on a year-over-year basis to $102.1 million in the second quarter. Adjusted net loss per ADS amounted to $0.03, surpassing projections.

Deliveries

On its quarterly conference call, Nio stated that during the first half of 2021, the penetration rate of battery electric vehicles in China reached 8.4% as per data from the China Passenger Car Association. Nio has managed to grow its penetration in Tier 1 and Tier 2 cities in China at a rapid pace with its penetration in the premium SUV segment reaching 13.7% in Shanghai during 1H21.  

During the second quarter of 2021, the company delivered 21,896 vehicles, up nearly 112% from the same period in 2020 and up 9.2% from the first quarter of 2021. Vehicle margin jumped to 20.3% from 9.7% in Q2 2020.

In July, Nio delivered 7,931 vehicles, reflecting a YoY growth of 124.5%. As of July 31, 2021, cumulative deliveries of the ES8, ES6 and EC6 reached 125,528 vehicles. For the third quarter of 2021, the company expects to deliver 23,000 to 25,000 vehicles. This represents a growth of around 88.4-104.8% on a year-over-year basis and approx. 5-14% on a sequential basis.

In 2022, Nio plans to deliver three new products based on the NIO Technology Platform 2.0, which include ET7, a smart electric sedan. The company is facing supply chain headwinds from the pandemic and extreme weather conditions with the former impacting its production in some parts of China. Nio is working on reducing the impact of these challenges on Q3 production and deliveries.

Battery and charging network

Nio continues to expand its battery swap, power charging and destination charging network. To date, the company has set up 361 battery-swap stations in 103 cities and completed over 3 million battery swaps for its users. Nio aims to increase the number of its swap stations to over 700 by the end of 2021 and to over 4,000 globally by the end of 2025.

The company has also set up over 238 power charging stations and installed 2,416 destination charges in China. Moving into the second half of the year, Nio is focused on strengthening its swapping and charging network as it gets ready to launch its new models in 2022.

Outlook

For the third quarter of 2021, total revenues are expected to grow approx. 96.9-112.8% YoY to a range of between $1.38 billion and $1.49 billion. On a sequential basis, revenues are expected to increase approx. 5.5-14%.

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