Nio shares fell after the Chinese electric vehicle maker reported larger-than-expected fourth-quarter losses and warned of a forced production cut in the second quarter.
Nio (NIO) shares fell 5.6% after close of trading on Monday, as the company reported mixed fourth-quarter results and warned of a slowdown in production of its electric vehicles due to global chip shortages.
The Shanghai-based electric vehicle maker also announced a cut in deliveries in February from January.
Nio Q4 data vs. Wall Street forecast
Nio reported a loss per share of $ 0.14 (0.93 yuan), better than last year’s loss of $ 0.39 per share, but worse than analysts’ estimates of $ 0.07 loss per share. The company’s management cited unfavorable exchange rates as an explanation for the quarterly losses.
Revenues were up 133.16% over the same period last year and 46.7% over the previous quarter to $ 1.018 billion (6.64 billion yuan). Analysts were expecting less growth to $ 1.01 billion. This is the third consecutive quarter as Nio reports strong revenue growth despite the coronavirus pandemic.
However, in February, the pace of sales of Nio’s electric vehicles decreased compared to January: from 7,225 to 5,578 units. The deliveries of ES6 crossovers amounted to 2,216 units, EC6 – 2,035 units, and ES8 – 1,327 units.
For the full 2020 fiscal year, Nio delivered more than 43,700 vehicles, more than double its total shipments in the previous year.
In addition, Nio previously announced that its ET7 electric sedan, a Tesla Model 3 rival that was launched in January, will ship in Europe in 2021.
The Nio EC6 crossover, in turn, competes with the slightly cheaper Chinese Tesla Model Y, which began shipping in January. Two versions of the much cheaper Volkswagen ID.4 should begin shipping to China by the end of March.
The balance of cash and cash equivalents of Nio at the end of 2020 was $ 6.5 billion.
Summing up the year, Nio CFO Wei Feng commented, “With a steady increase in supply, a stable average selling price, lower material costs and production efficiency, our vehicle margins reached 17.2% in the fourth quarter. In addition, we achieved positive cash flow from operating activities in the fourth quarter and for the full 2020 financial year. ”
Forward-looking statements from Nio
Nio said it plans to deliver between 20,000 and 20,500 vehicles in the first quarter, up 15-18% from the fourth quarter.
But due to global chip and battery shortages, Nio will have to return to 7,500 monthly shipments in the second quarter, according to Nio executives. In February, Nio increased production capacity to 10,000 vehicles per month, up from 7,500 previously.
Nio expects first-quarter revenues of $ 1.13 billion – $ 1.16 billion, up 438-451% from a year ago and 11-14% more than in the fourth quarter.
Nio CEO William Lee said the company’s forecasts will be conservative in the near term and although “we are quite confident in demand in the second half of this year, we do not yet have full visibility of the prospects.”
Li also said the company could release the vehicle to the mass market without giving details.