NIO
As a result of these issues, the company's gross margin has actually compressed. However, the company is confident that these challenges are in the rearview mirror as it sees production meaningfully increasing in Q4 and next year. Another silver lining is that reception for its new ET5 sedan has been quite strong, and the company expects a record quarter in terms of sales and deliveries.
Inside the Numbers
In Q3, Nio reported an adjusted loss per share of $0.30 which was wider than expectations of a $0.22 per share loss. It was also steeper than last year's $0.06 per share loss. However, revenue was up 32.6% and topped consensus expectations at $1.8 billion vs $1.6 billion.
The major factor in revenue growth was a 29% increase in vehicle sales. At the end of the quarter, the company had $7.2 billion in cash, a decline from $8.1 billion at the end of Q2. This is increasingly a focus of investors and analysts as the company's runway to scaling and positive free cash flow is getting shorter. Otherwise, Nio will have to raise cash by issuing shares or borrowing money which is dilutive to EPS.
In Q3, the company delivered 31,607 vehicles which was a new record for the company. Its gross margins were 13.3%, a big decline from last year's 20.3%. The company attributed this to lower subsidies for EV purchases and higher costs in terms of components and building out its network for charging and servicing vehicles.
The company remains bullish as it sees revenue accelerating in the middle of the next quarter along with the introduction of its ET5 sedan which is proving to be a hit given its design and price point. It also anticipates between 43,000 and 48,000 vehicles delivered in Q4 which comes out to revenue between $2.4 billion and $2.7 billion.
