"The NIO brand has already narrowed its discounts since June, and the next important task is to increase gross profit while ensuring sales increase." At the 2024 first quarter financial report conference call, NIO Chairman and CEO Li Bin stated that starting from ET9, NIO will switch to the third-generation platform with a gross profit target of 20%; The gross profit margin target of the Ledao brand remains above 15%.
On the evening of June 6th, NIO released its first quarter financial report. In this fiscal quarter, NIO's revenue was 9.908 billion yuan, a year-on-year decrease of 7.2% and a month on month decrease of 42.1%; The net loss was 5.184 billion yuan, an increase of 9.4% year-on-year and a decrease of 3.4% month on month; The gross profit margin of the entire vehicle was 9.2%, an increase of 4.1 percentage points year-on-year and a decrease of 2.7 percentage points month on month. In terms of sales, NIO delivered 30053 vehicles in the first quarter, a year-on-year decrease of 3.2% and a month on month decrease of 39.9%. As of March 31, 2024, NIO's cash and cash equivalents, restricted cash, short-term investments, and long-term fixed deposits amounted to RMB 45.3 billion.
Despite the significant pressure in the first quarter, NIO maintains a relatively optimistic attitude towards the second quarter. In the second quarter, NIO's expected revenue was 16.587 billion to 17.135 billion yuan, a year-on-year increase of 89.1% to 95.3%; The delivery guidelines for new cars range from 54000 to 56000, a year-on-year increase of 129.6% to 138.1%. In April and May, NIO delivered a total of 36164 new vehicles, and in June, NIO is expected to maintain a monthly delivery record of 20000 vehicles.
Li Bin believes that there are three main reasons for the growth in sales in the second quarter, namely the increased competitiveness of new products, the reduction of car purchase costs after adjusting battery rental prices, the expansion of sales networks, and the improvement of sales capabilities. Li Bin predicts that the gross profit margin of NIO's vehicles will return to double digits in the second quarter.
The reporter learned that starting from June, NIO has narrowed the discount level at the terminal and requested frontline sales personnel to increase the sales proportion of high gross profit margin products such as ES8 and ES7.
The first product of NIO's second brand, Le Dao, will begin delivery in September. At that time, NIO will complete the installation of over 100 stores, with a single store investment cost of approximately 1-2 million yuan, significantly lower than NIO. After the L60, Ledo's second product is a mid to large-sized SUV that meets the needs of large families. Sources close to this model project told reporters that the car's characteristic is its "unprecedented" size.
In the first half of 2024, the third brand Firefly project of NIO will be officially delivered. Li Bin stated that Firefly is positioned as an entry-level boutique small car, but like Ledo, it needs to meet the needs of families, especially the needs of the second car. Firefly will share the sales network with NIO brand.
In order to meet the production needs of the Ledo and Firefly projects, as well as the new order demand from NIO, NIO will soon launch a package of measures to increase production capacity. Li Bin stated that NIO has started training its existing factory employees and has started dual shift production to increase output. In addition, NIO has started building a third factory (F3) in Hefei, with a single shift production capacity of 100000 vehicles, which will produce subsequent NIO and Ledo brand products.
In addition to the three factories in Hefei, informed sources told reporters that the Firefly project will be put into operation at the NIO Fourth Factory (F4) in Chuzhou, Anhui. In December 2023, it was found through a search of NIO's official recruitment platform that the NIO F4 manufacturing project department had previously recruited production personnel related to stamping, painting, and body production.
On the overseas side, Li Bin stated that the EU's increase in tariffs related to new energy vehicles goes against global sustainable development. However, currently the NIO brand has relatively low sales in Europe, and its short-term impact is relatively small; But in the long run, NIO will adjust its strategies for Ledo and Firefly in Europe based on tariffs and other factors; Apart from the European market, NIO will enter the United Arab Emirates in the second half of this year.
NIO will continue to maintain the openness of external financing channels. Recently, NIO Energy Investment (Hubei) Co., Ltd. (hereinafter referred to as "NIO Energy") received a strategic investment of RMB 1.5 billion from Wuhan Guangchuang Emerging Technology Phase I Venture Capital Fund Partnership Enterprise (Limited Partnership) and other institutions. Li Bin stated in a conference call that after this financing, NIO still holds about 90% of its shares in NIO Energy; NIO Energy's independent financing plan has been launched and is open to investment from other car companies or investors.