Nio Earnings: Delivery tips, new electric vehicles in the spotlight as Nio Stock struggles

China Nio (NIO) reports its first-quarter results on Friday as major new electric vehicles are rolled out to the industry in a competition for new growth. The rise in Nio shares is just above 52-week lows.




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Nio has struggled with sluggish sales, a laggard of its startup rivals Li-Auto (LI) and XPeng (XPEV).

SO,. the company’s delivery prospects will be key. Nio is starting to roll out second-generation versions of its most popular electric SUVs, which were overdue for updates.

But competition in China’s electric SUV market, dominated by EV giants You’re here (TSLA) and BYD (BYDDF), becomes more and more intense.

Nio Earnings

Estimates: Analysts polled by FactSet expect Nio to widen its net loss per share in the quarter ended March to 38 cents from 12 cents a year ago. Revenue is expected to rise 13% to $1.675 billion, but that would be the weakest in years.

Nio has already revealed that it sold 31,041 EVs in the first quarter, slightly behind Li Auto and near the bottom of Nio’s forecast for 31,000 to 33,000 EV deliveries.

Results: Come back Friday before the market opens.

Outlook: Nio is likely to share the outlook for delivery and revenue for the current second quarter. Analysts are forecasting second-quarter revenue of $2.52 billion, up 70% year-over-year, according to FactSet.

Since Nio has already said it sold 6,658 EVs in April and 6,155 in May, its forecast will basically be for June.

Nio Stock

U.S.-listed shares of Nio fell 1.5% to 7.6 in Wednesday’s stock action. Nio shares are up around 3% so far in June, but have posted a 20% loss year-to-date. Shares hit a three-year low of 7 intraday on June 1.

China’s electric vehicle stock has spent most of 2023 below the declining 10-week moving average. In fact, Nio has spent almost all of the past two years below the 40-week average.

Battle in the electric SUV market

Amid big shifts in its product lineup, Nio’s electric vehicle sales fell in March, April and May on a month-to-month basis.

Nio was once nicknamed the You’re here (TSLA) of China because of the quality and luxury of its cars. It is now grappling with “both weak demand for its sedans and a major production platform transition for its SUVs,” Deutsche Bank analyst Edison Yu wrote in May.

But at the end of May, a new and improved ES6, based on a second-generation EV platform, hit the road. A similarly updated ES8 is expected to follow in June. Both popular models have reportedly seen sales plummet as consumers wait for a refresh.

The Nio ES6 has been a bestseller since its launch in 2019. It’s a potential growth driver for the rest of 2023 after updates.

But more and more new models continue to hit China’s crowded electric SUV market, with 20 launches in April alone. Nio’s SUVs will compete with Li Auto’s hybrid SUVs, as well as upcoming models in BYD’s high-end Denza lineup.

Additionally, Tesla’s Model Y remains very competitively priced, although the US electric vehicle giant raised prices slightly in May after cutting them earlier in 2023.

Tesla’s price cuts have led to an electric vehicle war in China.

TSLA and BYD stocks are in the buy range as of June 2.

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