Nio (NIO) deliveries reached 31,607 in Q3, but higher costs squeeze margins

Popular Chinese EV maker Nio (NIO) reported its Q3 earnings for 2022, showing solid top-line (revenue) growth with recent price hikes, yet higher costs led to a wider bottom-line loss than many predicted.

Meanwhile, Nio’s deliveries picked up again as the EV maker accelerates its push into the end of the year.

Nio third-quarter 2022 deliveries

As Electrek reported earlier this month, Nio’s electric vehicle deliveries reached 10,059 in October, climbing 174% YOY, but slipping 7.5% from September.

Altogether EV deliveries reached a record 31,607 in Q3, up 26% from 25,059 in the second quarter. Nio’s deliveries took a step back for the first time in Q2 over lockdowns in China due to COVID-19.

EV deliveries were up 29% compared to last year during the same quarter. Nio’s CEO, William Bin Li, stated:

NIO delivered 31,607 vehicles in the third quarter of 2022, representing a solid growth of 29.3% year-over-year and achieving a record-breaking quarterly delivery. Following the delivery of our new product lineup based on NIO Technology 2.0 catering to different market segments, we have witnessed strong growth momentum in user demand and robust foot traffic, especially after the debut of ET5s in stores from September, and expect the ET5 delivery will support a substantial acceleration of our overall revenue growth in the fourth quarter of 2022.

Like much of the auto industry, Nio has been struggling with supply chain disruptions, but the EV maker is overcoming it with new services and product launches. The CEO added:

To meet the growing user demand and shorten the waiting time, we have been working closely with supply chain partners to accelerate production and delivery.

Nio Q3 2022 earnings and financial results

Nio beat revenue estimates generating over $1.8 billion in Q3 2022, an increase of 32.6% from last year and 26% from Q2 2022.

Revenue from vehicle sales reached $1.677 billion, up 24% from the second quarter, while other sales generated $150.3 million. Meanwhile, Nio’s gross margin (13.3%) improved slightly from Q2 (13%) but is still down from last year’s 20.3% with higher material costs.

Vehicle margin was down to 16.4% from 18% last year and 16.7 % in Q2 2022. Nio says the drop was due to higher battery costs.

Overall, Nio posted a net loss of $577.9 million, a significant increase from last year (+392.1%) and from Q2 2022 (+49%) as the EV maker’s losses widen.

Steven Wei Feng, Nio’s CFO, adds:

We achieved solid top line growth in the third quarter of 2022 against a challenging market environment. We aim to consistently enhance the holistic user experience for our global user community by investing in core technology development as well as power network expansion, while continuously improving our operational execution and efficiency.

Nio ended the third quarter with $7.2 billion in cash.

Guidance

Looking ahead, Nio expects deliveries to continue gaining momentum, projecting between 43,000 and 48,000 EV deliveries in the fourth quarter, representing 71% to 91% growth YOY. Nio says the launch of the ET5 will help accelerate sales into the end of the year.

The EV maker also expects revenue between $2.4 billion and $2.7 billion in Q4, up 75% to 94% from last year. Nio’s stock is down over 74% this year but is bouncing back 10% today on stronger-than-expected earnings results.