NIO releases' strongest ever 'quarterly guidance, Li Bin gives profit schedule
Reporter Qiu Dekun from China Fund News
On the evening of November 20th, NIO released its financial report showing that its operating revenue for the third quarter of 2024 was 18.67 billion yuan, an increase of 7.0% compared to the previous quarter; The gross profit margin has increased to 10.7%, with the overall gross profit margin for vehicles rising to 13.1%.
At the same time, NIO released its "strongest ever" quarterly guidance, which shows that its expected operating revenue for the fourth quarter of 2024 is 19.68 billion yuan to 20.38 billion yuan, a year-on-year increase of 15.0% to 19.2%.
However, NIO still incurred losses in the third quarter of 2024. NIO's founder, chairman, and CEO, Li Bin, stated during the earnings call that the company aims to achieve profitability by 2026.
Delivery volume slightly decreased in October
Li Bin calls it "taking the initiative"
In the third quarter of 2024, NIO delivered 61855 vehicles, setting a new quarterly high. Meanwhile, NIO expects to deliver 72000 to 75000 vehicles in the fourth quarter of 2024, a year-on-year increase of 43.9% to 49.9%.
However, NIO's delivery volume in October 2024 was 20976 vehicles, slightly lower than the previous month. This means that NIO's total delivery volume in November and December 2024 will be between 51000 and 54000 vehicles.
In response to this, Li Bin stated during the earnings conference call that NIO's decrease in delivery volume in October 2024 was due to proactive measures and reduced promotional expenses.
It is reported that NIO has delivered over 20000 vehicles in previous months, leading to increased pressure to improve its gross profit margin. Our goal is to continuously improve NIO's brand gross profit margin, "said Li Bin
According to Weilai, at present, the company has adjusted its promotion strategy, which has had an expected impact on sales, and sales recovered after the price stabilized in November.
NIO's Chief Financial Officer, Qu Yu, stated that in the third quarter of 2024, the company increased its automotive gross profit margin to 13.1% through continuous cost optimization, and achieved positive free cash flow as sales continued to grow and gross profit margin steadily increased.
Target delivery volume for 2025 to increase by 100% year-on-year
Accelerate the promotion of multi brand strategy
By 2025, Li Bin has set a target for a 100% year-on-year increase in delivery volume.
In the first three quarters of 2024, NIO's delivery volume was 170300 vehicles, and with the delivery volume guided for the fourth quarter of 2024, it is expected to deliver 242300 to 245300 vehicles for the entire year of 2024.
The confidence that supports NIO to increase its delivery volume lies in its gradual entry into a multi brand development stage.
Qu Yu introduced that from 2025, NIO's three brands will usher in a strong product cycle, driving sales into a faster growth stage.
The three car brands planned by NIO are NIO, ONVO, and Firefly. Currently, NIO and ONVO have both been launched.
According to data provided by NIO, in the first three quarters of 2024, NIO consistently ranked first in the pure electric vehicle market in China with a market share of over 40%, exceeding 300000 yuan; The Ledao L60 has already opened for delivery, and production capacity will rapidly ramp up in the coming months.
Regarding the third-party brand Firefly, NIO announced on November 20th that its first product will have the same name as the brand, and announced that the first model will be released on NIO Day 2024 on December 21st, with plans to deliver in the first half of 2025.
NIO's positioning of Firefly is equivalent to BMW Group's MINI brand.
NIO stated that Firefly will leverage the company's accumulation in the high-end pure electric vehicle market to usher in the intelligent electric era of global high-end small cars in terms of design, safety, space, intelligence, and energy efficiency.
Li Bin said that using two to three brands to face different users is currently a successful strategy, with an increase far greater than a decrease.
Li Bin provides a profit schedule
Strategic investment of 3.3 billion yuan is about to be received
What has attracted attention from the outside world is that in the third quarter of 2024, new car making companies such as NIO and Xiaopeng Motors still incurred losses.
Li Bin stated on the evening of November 20th that with the doubling of sales in 2025, NIO's overall operations will continue to achieve positive growth, and it is expected that the loss amount will narrow in 2025, with the goal of achieving profitability by 2026.
Recently, the leaders and executives of several emerging car manufacturing companies have responded to the issue of losses and provided profit schedules.
On the evening of November 19th, He Xiaopeng, Chairman and CEO of Xiaopeng Motors, stated that in the fourth quarter of 2025, Xiaopeng Motors will enter a favorable period driven by AI transformation and super electric dual engines, accelerating towards profitability.
Gu Hongdi, Vice Chairman and Co President of Xiaopeng Motors, stated that the company had previously expected to achieve a balanced income and expenditure by the end of 2025, and currently maintains this forecast, hoping to achieve this goal as soon as possible.
In addition, NIO's previously acquired strategic investment of 3.3 billion yuan will be credited in the fourth quarter of 2025. Li Bin stated that NIO's cash reserves will further increase at that time, providing more sufficient guarantees for its high-speed growth in 2025.
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