Chinese Automaker Nio Expects Q2 EV Sales To More Than Double, Can It?
Despite never turning a profit yet, Nio believes it can more than double its EV sales. Why?
Chinese electric vehicle (EV) manufacturer Nio announced not too long ago a robust projection for its second-quarter deliveries, anticipating a significant surge compared to the previous year. The company expects deliveries to soar, more than doubling to a range between 54,000 and 56,000 units. Can it achieve this?
Concurrently, Nio forecasts a substantial increase in revenue, nearly doubling to approximately USD2.3 billion (roughly RM10,760,312,968) for the three-month period commencing in April. Despite its impressive growth trajectory, Nio, established nine years ago, has yet to turn a profit, so is this expectation too unrealistic for the brand?
Moreover, in the first quarter, the company reported a net loss of USD718 million (about RM3,358,761,222), compared to a loss of $772 million (around RM3,611,370,006) in the preceding quarter of 2023. However, Nio experienced a noteworthy rebound in May, particularly in deliveries of its Nio-branded electric vehicles priced from $4,000 (approximately RM18,712).
This resurgence followed the implementation of a battery rental scheme, which effectively lowered fees and incentivized sales, resulting in over 20,000 units delivered. In response to intense market competition in China, Nio, like many of its counterparts, is expanding its customer base and bolstering sales by introducing more affordable models.
The company has also undertaken strategic measures, including workforce reductions and deferral of non-essential long-term projects that do not promise financial returns within a three-year horizon. Nio’s expansion plans include the construction of a third factory in China, a development that would substantially augment its production capacity.
On top of that, once operational, the new facility, located in Huainan city within the eastern province of Anhui, will primarily cater to the production needs of Nio’s recently launched budget-friendly car brand, Onvo. In May, Nio unveiled its latest addition to the Onvo lineup, the L60 SUV, with a starting price of 219,900 yuan (about RM141,799).
This competitive pricing places the Onvo L60 in direct competition with Tesla’s Model Y, which starts at 249,900 yuan (about RM175,423) in the Chinese market. Overall, Nio’s strategic initiatives, coupled with its ambitious expansion plans and diversified product portfolio, position the company for sustained growth in China’s burgeoning EV sector.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
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