NIO Q2 2020 Earnings Report Released: Three Major Pieces of Information

As a translator for the automotive industry, I am responsible for English translation, spelling proofreading and phrasing revisions. Here are the improved versions of three major points that were revealed in NIO’s Q2 2020 earnings report:

• Total gross profit margin hit 8.4% and the gross profit margin per vehicle reached 9.7% in Q2 2020, both showing improvement.
• NIO China has completed its capital injection, and NIO now has cash and cash equivalents of RMB 11.2 billion.
• NIO’s delivery target for Q3 is 11,000 – 11,500 vehicles.

Let’s take a closer look at some details.

About Deliveries:

In Q2 2020, NIO delivered a total of 10,331 new vehicles (8,068 ES6s and 2,263 ES8s), a YoY increase of 190.8% and a QoQ increase of 169.2%.

This is the first time in NIO’s history that deliveries in a single quarter have exceeded 10,000 vehicles.

About Financial Data:

In Q2 2020, the total gross profit margin was 8.4%, and the gross profit margin per vehicle was 9.7%.

This is NIO’s second time achieving a positive gross profit margin, and the gross profit margin per vehicle is now very close to double digits. According to the financial report, the two reasons for this achievement were “reduced vehicle material costs and reduced unit production costs due to increased output.”

Although not mentioned, a significant contribution from the higher gross profit margin ES8 vehicle sales played a critical role in achieving this.

In Q2 2020, the company’s automotive sales revenue was RMB 3.49 billion, a YoY increase of 146.5% and a QoQ increase of 177.6%.

The operating loss in Q2 2020 was RMB 1.16 billion. This was a YoY decrease of 64.2% and a QoQ decrease of 26.1%.

NIO China’s capital injection has been completed. As of June 30, 2020, the company has RMB 11.2 billion in cash, cash equivalents, restricted cash, and short-term investments.

NIO’s CFO stated in the financial report that “due to delivery volume exceeding expectations in Q2 2020, the vehicle gross margin far exceeded our previous target of 5%.”

About Q3 Outlook:

The delivery target for Q3 2020 is 11,000 – 11,500 vehicles, with an expected revenue of RMB 4.05 billion.

This delivery target is considered conservative, with an average monthly delivery of not exceeding 4,000 vehicles. This is believed to be due to limitations in production capacity.

Let’s revisit Bin Li’s goal, which was mentioned in the Q4 2019 earnings report: a positive gross profit margin in Q2 and a double-digit gross profit margin in Q4.

Looking at the current situation, it seems that these goals can be easily achieved. Compared to the poor Q2 earnings reports in the automotive industry, NIO’s Q2 2020 earnings report is considered to be remarkable.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.