Chinese EV Startup NIO Announces its 2018 Earnings, Loses $1.4 Billion Last Year

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【Summary】Electric automaker NIO released it fourth quarter earnings today reporting mixed results, including a $1.4 billion net loss in 2018.

FutureCar Staff    Mar 05, 2019 5:39 PM PT
Chinese EV Startup NIO Announces its 2018 Earnings, Loses $1.4 Billion Last Year
A NIO flag hangs on Wall Street in Sept 2018 when the company began trading on the NYSE.

Electric automaker NIO released it fourth quarter earnings today reporting mixed results, including a $1.4 billion net loss for 2018. The automaker reported total revenue of RMB 499.7 million ($3.4 million) for 2018. The figure represents a net loss of 47 cents per share for the year.

NIO reported a fourth quarter loss net loss of RMB 3,503.0 million ($522,243,000). For the year 2018, the automaker reported a net loss of RMB9,639.0 million ($1.4 billion), compared with net loss of $1.3 billion in 2017.

Excluding share-based compensation charges, adjusted net loss (non-GAAP) for 2018 was RMB8,959.5 million ($1.3 billion).

Nio says it expects a bigger-than-expected slowdown in deliveries in the first quarter of 2019, partly due to "accelerated deliveries made at the end of last year in anticipation of EV subsidy reductions in China in 2019," the company wrote in a statement. The automaker also cited the typical seasonal slowdowns that normally occur around the traditional Chinese New Year holiday celebrations in February.

However, the automaker warned of a sharp slowdown in deliveries in 2019, as the auto market in China cools. Nio also announced it cancelled its plans to build a Shanghai manufacturing plant, which the company says will allow it to focus on the joint manufacturing model in the long term.

NIO managed to narrow its losses in the fourth quarter, boosted by strong sales of its ES8 premium electric SUV, as the automaker ramped up production and deliveries in Q4. NIO's ES8 is a seven passenger SUV with an aluminum alloy body and carries a price tag of 448,000 yuan ($65,300) before incentives.

The automaker produced a total 8,069 units of the electric ES8 in Q4, up 91.8 percent from the prior quarter. NIO delivered a total of 7,980 units in Q4, and increase of 144 percent.

For 2018, it produced a total of 12,775 ES8 SUVs and delivered 11,348 of them to customers.

Nio began deliveries of the ES8 on June 28, 2018.

So far this year, NIO reported it delivered 1,805 ES8's January and 811 in February 2019. The totals reflect a greater than anticipated slowdown in monthly deliveries compared to December 2018 when it delivered 3,318 ES8s.


The NIO ES8 electric SUV

NIO made headlines in Sept 2018, when it became the first Chinese electric carmaker to go public in the U.S. NIO began trading on the New York Stock Exchange under the symbol "NIO" on Sept 11, 2018.

NIO Could be Tesla's Biggest Rival in China

NIO was founded by Chinese entrepreneur Bin Li in 2014. NIO debuted the ES8 in December 2017, its first mass-produced electric vehicle. The electric automaker plans to launch a second, lower-priced fully-electric sport-utility vehicle named the ES6 later this year.

NIO is seen as a strong rival to U.S.-based Tesla in the Chinese market. The ES8 costs about half the price of a Tesla Model X in China, which starts at $116,000 (RMB 778,200).

The automaker is based in Shanghai with its U.S. headquarters and software development center located in San Jose, California.

In January, NIO launched a $650 million five-year convertible bond to fund its expansion. The company plans to use the proceeds of the convertible bond for research and development, expansion of its manufacturing facilities, as well as sales and marketing.

Louis Hsieh, NIO's chief financial officer, told investors at the time that part of the reason for selling a convertible bond was to make up the difference between what the company raised in its IPO and what it had originally sought to raise.

NIO hoped to raise around $1.8 to $2 billion from its IPO in Sept 2018, but only raised $1 billion of that amount. The automaker is backed by Chinese internet giant Tencent Holdings.

NIO shares were trading higher today at $10.16, up 3.9 percent.  

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