The Chinese electric-vehicle manufacturer, NIO, has recently released its third-quarter results, exceeding market expectations despite a fierce price war within the industry. Additionally, the company's positive guidance has contributed to its increasing stock value.
NIO reported a net loss of $542 million from sales totaling nearly $2.6 billion for the third quarter, surpassing Wall Street's estimated loss of approximately $600 million from the same sales volume. The company's management highlighted the remarkable growth in deliveries and its notable market share for its price point.
CEO William Bin Li announced that NIO delivered a total of 55,432 vehicles in the third quarter of 2023, representing a substantial year-over-year growth of 75.4% and setting a new record for quarterly deliveries. He further stated that, according to the retail sales data from China Automotive Technology and Research Center, NIO secured the leading position in the battery-electric vehicle market segment priced over RMB300,000 in China, capturing an impressive market share of 45% in the third quarter.
Notably, NIO differentiates itself by offering more premium cars, with prices starting at approximately $42,000 (equivalent to RMB300,000), while a Tesla Model 3 in China comes at a lower price point, starting below $34,000.
NIO's robust performance in the market demonstrates its ability to stand out among competitors and maintain a strong foothold in the Chinese electric vehicle industry.
NIO Looks to Deliver Strong Q4 Results
In the fourth quarter, NIO, a leading Chinese electric vehicle manufacturer, is anticipating delivering approximately 48,000 vehicles, a significant increase compared to the 40,000 units delivered during the same period last year. The company has already achieved 32,000 units delivered in October and November 2023 combined, which suggests another strong month of approximately 16,000 units for December. In December 2022, NIO successfully delivered 15,815 units, demonstrating consistent growth.
Despite fierce price competition within the Chinese market, NIO's performance seems promising and in line with investor expectations. Although industry competition remains "intense," according to the company's news release, investors seem satisfied with the results.
In early Tuesday trading, NIO stock experienced a 3.3% increase, while the S&P 500 and Nasdaq Composite saw a slight decline of about 0.4%.
Over the past year, NIO shares have been trailing behind, experiencing a decline of approximately 43%. Conversely, shares of NIO's competitors, XPeng and Li Auto, have demonstrated significant growth during the same period, with increases of about 41% and 62%, respectively.
Li Auto has showcased impressive sales growth and profitability. On the other hand, although XPeng's sales growth has been slower than NIO's, recent results indicate improvement. Throughout the year, NIO has consistently maintained stable sales results.
While both NIO and XPeng have yet to become profitable, NIO's stock currently trades at approximately 1.1 times the projected 2024 sales. In comparison, XPeng trades at around 1.8 times sales. Li Auto stock trades at roughly 21 times the estimated 2024 earnings.