Overview
NIO announced its 2021Q2 financial report, and here are some of the highlights:
Vehicle sales were RMB7,911.8 million (US$1,225.4 million) in the second quarter of 2021, representing an increase of 127.0% from the second quarter of 2020 and an increase of 6.8% from the first quarter of 2021.
Vehicle marginii was 20.3%, compared with 9.7% in the second quarter of 2020 and 21.2% in the first quarter of 2021.
Total revenues were RMB8,448.0 million (US$1,308.4 million) in the second quarter of 2021, representing an increase of 127.2% from the second quarter of 2020 and an increase of 5.8% from the first quarter of 2021.
Gross margin was 18.6%, compared with 8.4% in the second quarter of 2020 and 19.5% in the first quarter of 2021.
Net loss was RMB587.2 million (US$90.9 million) in the second quarter of 2021, representing a decrease of 50.1% from the second quarter of 2020 and an increase of 30.2% from the first quarter of 2021. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB335.8 million (US$52.0 million) in the second quarter of 2021, representing a decrease of 70.3% from the second quarter of 2020 and a decrease of 5.3% from the first quarter of 2021.
Basic and diluted net loss per American Depositary Share (ADS) were both RMB0.42 (US$0.07) in the second quarter of 2021. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted basic and diluted net loss per ADS (non-GAAP) were both RMB0.21 (US$0.03).
Cash and cash equivalents, restricted cash and short-term investment were RMB48.3 billion (US$7.5 billion) as of June 30, 2021.
Q&A Session
- The next two new models in 2022 and the timing of ET7?
NIO anticipates ET7 will be delivered on time in early 2022 and NT2.0 will be the main platform for ET7 and the next two products.
One of the new cars will be way much cheaper and will be released by another brand/entity. This product will not be that cheap as Wuling Hongguang Mini EV, however, it should enter the same price range as TSLA’s products do, and at the same time, provide a better quality of service. The relationship between the new brand and NIO will be similar to Audi-Volkswagen and Lexus-Toyota.
- Insights on the production/supply chain considering the COVID-19 and natural disasters in Europe.
In fact, the Q3 delivery outlook has already been constrained because of the COVID-19 — some of the chip factories in Malaysia stop the operations and other parts of the car manufacturers have also been affected — flood Germany has also applied a certain level of effects on the production. On the other hand, NIO has tried to do more preparations to manage such uncertainties.
- Business movement and actual delivery in Norway
NIO does not see a very huge delivery in Norway in 2021 — NIO focuses more on the general business development outside of China mainland — this is a very long-term strategy.
- Changes in margins
In Q2, there are more ES6 sold and this then lowers the general margins, considering ES6 simply just has a lower contribution in the margins compared with ES8/EC6. On the other hand, as the economic scale, the cost per car has also dropped, however, combined with the effect of more ES6 sold, margins still slightly went down a little bit.
- Rates of NOP and BaaS subscription/installation
NOP~80% and BaaS~60% — these metrics are gradually going up.
- Business development in NIO Space
NIO launched the NIO Space partner program before, however, NIO is trying to buy back these NIO Space from partners — simply because NIO wants to make the business service more controllable and consistent.
- R&D — current team size in the AD development
NIO has a team of 500 engineers working in the AD development (4 VPs are directly reporting to Li Bin)across the whole firm, and it looks to grow this team to about 800 people by the end of 2021.
