Nio Earnings Mixed As China EV Maker’s ET7 Deliveries Loom

Nio (NIO) reported a wider-than-expected fourth-quarter loss late Thursday while revenue growth slightly topped. Nio stock fell early Friday, as the China EV maker guided low for first-quarter deliveries.


Nio Earnings

Estimates: Wall Street expected the China EV startup to lose 14 cents per American depositary receipt vs. a loss of 16 cents a year ago. Revenue was seen jumping 49% year over year to $ 1.532 billion, according to FactSet. But that would mark a slowdown in sales growth for a third straight quarter and would be down sharply from Q3’s 122% sales gain.

Results: Nio lost 16 cents vs. a year earlier, flat vs. a year earlier. Revenue rose 52% to $ 1.55 billion.

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Outlook: Nio said it would deliver 25,000-26,000 vehicles in Q1. That suggests March sales will come in at roughly 9,200-10,200 EVs. Nio delivered 9,652 vehicles in January and 6,131 vehicles in February, with the Chinese New Year taking a toll on sales last month.

But that’s below analyst estimates for around 28,000 vehicles delivered in Q1.

Shanghai-based Nio has already said that it sold 25,034 EVs in Q4 2021, near the high end of its targeted range. Nio’s Q4 sales were up 44% year over year and also up slightly from Q3.

But Nio faced supply and production challenges due to the global chip shortage, which weighed on Q4 sales. This year, Xpeng (XPEV) and Auto them (LI) outsold Nio in both January and February. Nio and its EV startup peers are emerging rivals to Tesla (TSLA) in China, the world’s biggest market for electric cars.

Nio Stock

Nio stock fell 5% early Friday. Shares rose 0.5% to 21.97 in Thursday’s stock market trading, moving back toward its 50-day line.

Tesla rose 1.5% Thursday, advancing toward a 1208.10 buy point after opening its first Europe factory near Berlin. Xpeng, which reports Monday, added 0.2%. Li Auto gained 2.2%. China EV giant BYD (BYDDF) edged up 0.3%.

Once-white-hot Nio stock tumbled in the past year. However, Nio is back above its 21-day exponential moving average, and is close to retaking the 50-day average, after jumping last week as delisting fears eased. The 21-day and 50-day averages have fallen below their longer-term, 200-day counterpart, a sign of recent struggles. Nio remains well off highs with no buy point in sight.

China EV Stock Could More Than Double: Analyst

The “tide may finally be turning” for Nio stock, Deutsche Bank analyst Edison Yu wrote March 20.

“While volumes have stagnated over the past few quarters due to operational bottlenecks, we think deliveries are on track to increase from 10,000 per month to 25,000 exiting the year, which will shift the narrative away from supply constraints to product cycle,” he said.

Yu cited the launch of three new electric vehicles, including the ET7, Nio’s first electric sedan. He rates Nio stock a buy with a 12-month price target of 50, which would be more than double Thursday’s closing price.

Nio’s ET7s began rolling off the production line in Hefei Thursday, according to Deliveries are set to begin on March 28.

Nio CEO William Li sees the luxury, highly autonomous ET7 as a rival to Tesla’s Model S.

In 2021, EV sales boomed in China, making it once again the world’s largest market for electric cars.

But headwinds abound for Nio stock. Fears of a US delisting for Chinese stocks revived recently, though Beijing last week signaled progress on addressing the issue with US regulators.

Globally, automakers face shortages of critical components, including auto chips, as well as rising costs for raw materials. And last week, Volkswagen (VWAGY) said that it make China a priority as the Ukraine war hits the auto supply chain in Europe.


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