Quarterly delivery reached a new high, but the company's revenue experienced negative growth and losses did not narrow. After submitting such a third quarter report, NIO (NIO/09866) has accumulated losses exceeding 100 billion yuan in less than 7 years. Is the profit expectation given by NIO Chairman Li Bin again credible?
On the evening of November 20th, NIO released its third quarter report. In the third quarter of 2024, the company achieved a revenue of 18.67 billion yuan, a year-on-year decrease of 2.1%; The operating loss was 5.24 billion yuan, of which the net profit attributable to common shareholders of the company was -51.4 billion yuan, and the loss expanded by 11.1%.
Caizhongshe noticed that NIO has achieved good growth in sales. In the third quarter of 2024, the company delivered a total of 62000 new cars, a year-on-year increase of 11.6%, and quarterly sales reached a historic high. Since May, NIO's monthly sales have consistently stood at over 20000 units. Prior to this, the company only achieved this sales performance in July 2023.
Although sales have peaked, revenue has experienced negative growth, which is clearly related to the decrease in average sales price. In the third quarter of 2024, NIO's bicycle sales revenue was approximately 270000 yuan, a year-on-year decrease of 14.1%. The price reduction has led to an increase in sales, but the increase in volume cannot compensate for the losses caused by the price drop, and NIO's revenue has still experienced negative growth.
NIO expects to deliver 72000-75000 vehicles in the fourth quarter of 2024, achieving revenue of 19.68 billion yuan to 20.383 billion yuan. According to this calculation, NIO's bicycle revenue in the fourth quarter was 262400 to 283100 yuan.
This does not mean that NIO's bicycle revenue will increase in the fourth quarter. Because in addition to car revenue, NIO also has a small portion of revenue from spare parts and after-sales services. In the third quarter of 2023, this revenue accounted for approximately 10%. Based on this proportion, NIO's bicycle revenue in the fourth quarter was approximately 243000 to 244000 yuan.
This is not surprising, in addition to the main brand NIO, NIO has launched the more affordable Ledao brand. 832 vehicles were delivered in the first month of September, and NIO sold 21000 vehicles in October, including 4319 vehicles sold by Ledao and 17000 vehicles sold by NIO brand. The record of delivering over 20000 vehicles for five consecutive months has come to an end.
Caizhongshe found that a welcome change for NIO is the continuous improvement in gross profit margin. The gross profit margin of the company in the third quarter of 2024 is 10.7%, of which the gross profit margin of automobiles is 13.1%. The company's gross profit margin has returned to double digits, and the gross profit margin of the automotive sector has achieved double digits for two consecutive quarters.
However, the improvement in NIO's gross profit margin is not due to the company's own cost reduction and efficiency increase, but rather more dependent on the price reduction of upstream raw materials.
When explaining the increase in gross profit margin of the vehicle business, NIO stated that it was mainly due to the decrease in unit material costs. The price reduction of automobiles has affected the further increase of gross profit margin.
The upstream raw materials for new energy vehicles are still under performance pressure. In the lithium industry, which is the core of batteries, Ganfeng Lithium (01772) achieved a net profit of 120 million yuan in the third quarter of 2024, a year-on-year decrease of 24.9%. Tianqi Lithium (09696) incurred a loss of approximately 500 million yuan, a year-on-year decrease of 130.1%.
Compared with previous quarters, the two lithium industry leaders either narrowed their losses or achieved a turnaround from losses to profits. If the price of lithium carbonate hits bottom and recovers, it is not good news for downstream vehicle manufacturers.
At the performance meeting after the third quarter report, NIO's management stated that they will increase their target gross profit margin from 15% to 20% by 2025. Among them, with the subsequent addition of new products, the gross profit margin of the Ledao brand will gradually increase from the current 10% to 15% by 2025.
The upstream lithium carbonate raw materials seem to be showing signs of bottoming out, and the cost dividends of vehicle manufacturers such as NIO are about to be squeezed.
During the conference call, NIO Chairman and CEO Li Bin once again provided profit expectations. Li Bin stated that the company aims to achieve 100% sales growth by 2025, with an annual sales volume of approximately 450000 units; We plan to achieve profitability by 2026.
Profit has become NIO's Achilles heel. From 2018 to 2023, NIO's accumulated losses have reached 86.63 billion yuan, and now the company has lost another 15.53 billion yuan in the first three quarters. So far, in less than 7 years, NIO has accumulated a loss of 102.16 billion yuan, exceeding 100 billion yuan in losses.
Whether it is a traditional automaker or a new force in car manufacturing, NIO's losses have always been significantly ahead. The accumulated losses of over 100 billion yuan now will only further increase the company's profit pressure.
As early as the 2021 performance conference call, NIO founder Li Bin set the banner of achieving profitability by 2024, which is also NIO's 10th anniversary.
In subsequent phone conferences, Li Bin also stated more than once that the company's gross profit margin would increase, and the target of 15% was repeatedly mentioned. The same goes for profits, quarterly profits, breakeven, and so on.
The actual result is that NIO's losses are not only not narrowing, but expanding. Moreover, currently, NIO no longer has much financial resources to bear losses.
As of the end of the third quarter of 2024, NIO's total liabilities were 87.92 billion yuan, with an asset liability ratio of 84.5%, and the company's net assets were only 16.07 billion yuan. At present, NIO's quarterly losses are over 5 billion yuan. At this rate, it cannot significantly reduce its losses next year, and whether NIO's net assets can remain positive is questionable.
At present, NIO already has its main brand and Ledao, and by 2025, it will launch a more affordable Firefly series. The stalls are getting bigger and bigger, and there are more and more places that need money. How to make profits for new car manufacturers is already a difficult problem, especially for NIO.