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Chinese electric automaker Nio Inc. (NIO, $10.34), on Thursday, reported a bigger quarterly loss due to a jump in costs and said it expects deliveries to almost double in the current quarter. Nio added that it delivered 31,607 vehicles in the third quarter, up 29% from the third quarter of 2021 and a record for the company.
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Nio’s gross margin was 13.3%, slightly improved versus the 13% margin it reported in the second quarter, but down from 20.3% a year ago. Nio said the year-over-year margin decline was due to lower sales of regulatory credits, higher costs that have squeezed margins on its vehicles, and higher spending on its charging and service networks.
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Nio expects deliveries of its vehicles, which include hybrids, EVs, and fuel-cell units, to be between 43,000 and 48,000 for the fourth quarter. While on an earnings call, Nio management said it will launch five new EV models in the first half of 2023, according to local media reports.
Why it matters
Sales at Nio, Xpeng, and Li Auto Inc. (LI, $17.41) have surged in recent quarters on robust demand, helping them emerge as strong rivals to home-grown BYD and U.S.-based Tesla. The competition is growing in the premium EV SUV segment. Li recently introduced the L9 premium hybrid SUV. XPeng also is bringing more SUV models to market. Tesla (TSLA, $190.72) recently cut the Model Y price in China. This comes as most Chinese electric vehicle (EV) makers are battling higher battery prices, intensifying competition, and a rise in the cost of sales.
