Nio Earnings Mixed, Outlook Weak As Tesla China Rival Ramps Up Models, Markets

Nio stock slid further below key levels Wednesday morning with Nio (NIO) reporting a wider-than-expected second-quarter loss and weak revenue guidance.

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Nio’s EV deliveries rose 14%, year over year, in Q2. They slowed in July and August vs. June, but held above 10,000 both months.
The once red-hot Chinese EV startup has seen headwinds mount. Those headwinds include new export curbs on Nvidia (NVDA), a Nio chip supplier. It also includes fierce new competition and fresh Covid-19 lockdowns in China.
Investors will be keen to learn how Nio is managing through persistent supply challenges while pursuing ambitious growth strategies. The emerging Tesla (TSLA) rival is launching several new EVs, expanding overseas, and eyeing a mass-market foray.
Nio Earnings
Estimates: Analysts polled by FactSet expect net loss to widen to 16 cents per American Depositary Share from 6 cents a year ago. Revenue is seen growing 8.5% to $1.415 billion, below the low end of Nio’s Q2 guidance range.
Results: Nio lost 20 cents a share, while revenue climbed 22% to $1.54 billion.
Outlook: Nio sees Q3 revenue of $1.918 billion-$2.03 billion. Wall Street had expected Q3 revenue of $2.38 billion, a 55% gain. The EV maker also sees Q3 deliveries of 31,000-33,000. With 20,729 EVs delivered in July and August already, that implies September deliveries of 10,271-12,271.
Nio Stock
Shares fell 4.4% before the open on the stock market today. Nio stock lost 3.5% to 17.11 on Tuesday. Nio stock met resistance at the 50-day moving average in late August and remains far below the 200-day average.
Startup rivals Li Auto (LI) and Xpeng (XPEV) fell about 1% early Wednesday after losing more ground Tuesday. Li Auto stock edged lower to a three-month low while XPEV stock sank 5.1% to a record low.
China EV giant BYD (BYDDF) rebounded 0.8% Tuesday, following a four-session plunge as Warren Buffett sold a small amount of his big stake. Tesla stock rose 1.6%, back above its 50-day moving average as it fights for support there.

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Nio EV Sales, Growth Strategies
Founded in November 2014, Nio targets the Chinese market for premium electric cars. As of August, it had produced and sold almost a quarter-million electric vehicles cumulatively.
EV sales more than doubled for Nio — and for China overall — in 2021. But the lingering chip shortage and other supply disruptions hit Nio’s production and EV sales earlier this year.
Nio sold 25,059 EVs in Q2, roughly in line with the top end of its delivery guidance. It sold 10,052 EVs in July and 10,677 EVs in August, both below June’s level.
But the EV startup did increase deliveries in August vs. the prior month, trumping Xpeng and Li Auto, which reported declines.
In July, a shortage of casting parts hurt the production of Nio EVs, including the flagship new ET7 electric sedan. But Nio began delivering the new ES7 SUV on Aug. 28 and plans to launch the smaller ET5 sedan on Sept. 30.
Besides a growing EV lineup, Nio plans to expand abroad, shipping the luxury ET7 to Europe. It already sells EVs in Norway and aims to be in 25 countries by 2025.
Various reports suggest that Nio could launch a mass-market EV, challenging the likes of Volkswagen (VWAGY) in China.
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