NIO released financial results： 2023 full-year revenue and losses hit new highs

　　NIO announced the fourth quarter and full year results of 2023: the annual revenue hit a new high, but the loss also hit a new high, exceeding 20 billion yuan.

　　In 2023, NIO sold more cars, but R & D, marketing, and a number of business expenses around the main business of selling cars also hit a record high; although in the fourth quarter of last year, NIO began to lay off employees and increase organizational efficiency, it will take time to reflect in its financial performance.

　　At the earnings call, Li Bin, founder, chairperson and CEO of NIO, said several keywords: intelligence, power replacement, channel sinking, and "Alps", the second brand "focusing on the home market". "Alps" for the mass market is considered by many investors to be the key to NIO’s turnaround in 2024. After Li Bin talked about "Alps" ‘first new car, three product plans, channel layout and cost advantages against Model Y, NIO’s US stock price turned red from a drop of more than 8%, up 2.81%.

　　In 2023, after a brief highlight of 20,500 sales in July, NIO did not maintain the level of 20,000 monthly sales. In the fourth quarter, NIO delivered 50,000 new cars, an increase of 24.95% year-on-year and a decrease of 9.71% month-on-month. The month-on-month decline in sales directly led to NIO’s revenue and profit performance in the fourth quarter falling short of the third quarter. In the fourth quarter, NIO achieved revenue of 17.103 billion yuan, an increase of 6.47% year-on-year and a decrease of 10.30% month-on-month; the net profit loss attributable to the parent company was 5.593 billion yuan, and the year-on-year loss narrowed by 4.34%, but the loss expanded by 20.83% quarter-on-quarter.

　　With the product lineup to the new ES6, ET5, ET5T and other relatively low-priced models switching, ASP (average selling price) also continued to decline. In the fourth quarter, NIO ASP was 308,500 yuan, the same, compared with the month decreased by 60,000 yuan, 5,600 yuan.

　　Throughout 2023, NIO delivered 160,000 new cars throughout the year, an increase of 30.7% year-on-year; revenue 55.618 billion yuan, an increase of 12.89%, a record high.

　　In the past few years, focusing on the main business of car manufacturing, NIO has expanded its battery, chip, smart car, mobile phone, overseas, sub-brand, power exchange and service. The extremely large territory has kept NIO’s various expenses high. Although NIO announced a number of cost reduction and efficiency measures such as layoffs in the fourth quarter of last year, its financial performance is still very limited. In 2023, R & D expenses were 13.431 billion yuan, an increase of 23.9% year-on-year, which was higher than the ideal 2.80 billion diversified; sales, general and administrative expenses were 12.885 billion yuan, an increase of 22.3% year-on-year, higher than the ideal 3.10 billion diversified.

　　R & D, channel expansion and other investment is huge, and it is difficult to cover NIO’s current car sales revenue scale, which makes NIO continue to lose money throughout the year and set a new high. In 2023, NIO’s net profit loss attributable to the parent company exceeded 20 billion yuan for the first time, reaching 21.147 billion yuan, and the loss increased by 45.25% compared with 2022.

　　In 2024, the competition for new energy vehicles is becoming more and more intense. In the new power enterprises, the ideal sales are temporarily ahead of the market, but the final outcome is undecided, and players are still accelerating their position in the window period. For NIO, the top priority is the recovery of sales. In January and February this year, NIO delivered 10,100 and 8,100 vehicles respectively. According to the guidance given by NIO in the financial report, 31,000 – 34,000 vehicles will be delivered in the first quarter of this year. According to this calculation, NIO will deliver new cars 12,800 – 14,800 vehicles in March.

　　Li Bin remains optimistic about sales in 2024, saying that he is confident that this year will "return to the level of 20,000 vehicles per month", and "hopes to reach this level as soon as possible". To achieve this goal, NIO will continue to make efforts to improve the intelligent experience, replenishment, and channels of its products. At the end of February this year, NIO announced that seven 2024 models, including ET5T and the new ES8, will be ordered, with upgraded performance, improved experience, and unchanged prices. They will be delivered one after another in early March; 2024 ET7 models will also be released and locked in April. "After the upgrade, the performance, especially the intelligent computing power, must be the world’s leading level," Li Bin said. In 2024, NIO will focus on the delivery of software functions. According to reports, in the second quarter, NIO will launch a full-scale push of global pilot assistance (NOP +) including highways, urban areas, power exchange, etc., and the end-side multi-modal large model NOMI GPT will also be launched soon. In terms of replenishment, this year’s NIO deployment of power stations will not only promote sharing between the main brand and the second brand, but also from the perspective of increasing sales. Channel sinking is also a major focus. Li Bin revealed that the Yangtze River Delta region currently contributes more than 50% of NIO’s sales, and the proportion of sales in first-tier cities is as high as 70% -80%. " We recognize the importance of infrastructure to sales in third- and fourth-tier or even lower-tier markets ", so NIO will" have a considerable part of the charging and replacement infrastructure "in these lower-tier markets this year. NIO’s main brand, NIO, will not launch new models in 2024 except for model changes, and Li Bin also emphasizes that gross margin is priority and will not participate in price wars.

　　According to NIO’s plan, the second brand "Alps" will be released in the second quarter of this year, focusing on the family market. Li Bin said that "very competitive models will be launched for families of different sizes." In the third quarter of this year, NIO will release the first model of the "Alps" brand, and in the fourth quarter, large-scale deliveries will start. Li Bin said that at the end of last year, the VB car (Validation Build, engineering verification car) of the first model was off the production line, and "I am very satisfied with the state of this car." Li Bin also revealed more product plans for "Alps": the first model is a direct competitor to the Model Y; the second model is aimed at large family users, and has entered the mold opening stage. "The research and development is very smooth" and is expected to be launched to the market next year; the third car is still in the development process. Li Bin revealed that the first model is about 10% cheaper than the Model Y, "leaving a good space for pricing", revealing that the price may be more advantageous. In terms of after-sales, "Alps" will establish a separate sales network, and currently "has locked in enough resources". The overall goal this year is no less than 200 networks; in addition, "Alps" and the main brand will share part of the after-sales system and most of the power stations. With the arrival of "Alpine", NIO will also open the era of dual-brand operation. It is reported that the two brands will adopt different strategies: the main brand will not launch models with lower prices than NIO ET5 in the future, nor will it exchange volume through price wars; while for "Alpine", "volume" has a higher priority. Li Bin also revealed at the conference call that "hundreds of thousands (yuan) of models" will be launched next year. According to the previously announced news, this will be a product of NIO’s third brand "Firefly". (Source: NIO)