Softer guidance does not come as a surprise, as production was stalled for about three weeks in April, the first month of the quarter, due to the COVID-19 lockdowns in China.
Even after the restart of production, the ramp-up has been slow and steady. Nio is optimistic about the way forward.
Here're a few promising updates the company provided on its earnings call:
1. Recovery Post Covid-19 Is Well And Truly Underway: Nio confirmed on the earnings call the supply chain and vehicle production have returned to normalcy, beginning in June. The demand picture is also improving. The company noted vehicle deliveries have re-accelerated in Shanghai and several other key markets. The company also said order intake was at a record in May, with the ET7 showing particular strength.
2. NOP+ Function In The Pipeline: Nio said it will release its Navigation-On-Pilot+ version based on the HD map in the third quarter. The company noted the HD map has been co-developed with its partner.
3. Vertical Integration Into Batteries: More than 400 employees have been working on battery-related technologies, including battery materials, cell and pack design, battery management system and manufacturing processes, the company said. The company sees this foray as helping to improve its profitability in the long run. Rumors of Nio foraying into battery manufacturing had surfaced in late May.
On the earnings call, Nio said it will start producing an 800v battery pack in the second half of 2024. This battery, according to the company, is capable of battery swapping. Long run, the company plans to have a policy of in-house battery manufacturing and external purchase.
4. Mass Market Vehicle Update: Nio noted it has signed a strategic cooperation agreement with Hefei for the second phase of the plant for manufacturing vehicles and facilities for making components at the NeoPark. This, according to the company, will mark the start of planning and evaluation for the production of a mass-market brand.
The company expects to price the brand between 200,000 yuan to 300,000 yuan ($29,900-$44,850). This brand will be based on the next-generation NT3.0 technology platform. It will be powered by an in-house battery pack and will be capable of high-voltage fast charging and battery swapping. Nio expects the first mass-market vehicle to be delivered in the second half of 2024.
NIO Price Action: Nio stock was seen slumping 7.38% to $18.88 Thursday afternoon, according to Benzinga Pro data.
Photo: Nio ET5 courtesy Nio