NIO ＂sell a loss 110,000＂, NIO has a future？

Recently, NIO disclosed its financial report for 2022. The NIO Xiaopeng ideal, which has always been compared by everyone, is inevitably used by the industry for financial competition. However, unexpectedly, NIO, which has always been the big brother in the new car manufacturing forces, has the highest revenue but more losses. In comparison, Xiaopeng and the ideal gross margin are slightly better.

Simply put, NIO lost 14.437 billion in 2022, an increase of 259.4% year-on-year; if calculated by the delivery volume of 122,486 vehicles last year, NIO will lose 117,800 yuan on average for every car sold. And you can also see that in the fourth quarter of last year, NIO’s gross profit margin fell to 3.9%, and the annual gross profit margin was only 10.4%. This data compares to the ideal 20% to know how low it is. In this case, does NIO have a future?

From its establishment in November 2014 to March 2023, NIO has experienced eight years. As the most powerful and reputable new energy vehicle company among many new car-making forces, Li Bin, the founder of NIO, is the founder of Yiche, the first overseas listed automotive Internet company in China. Before going public in 2018, NIO had received more than 2 billion US dollars in financing, and investors included Tencent, JD.com, Hillhouse, Hopu and other first-class institutions. In 2018, NIO successfully went public in the United States, with a financing scale of up to 960 million US dollars, making it the third largest financing scale among Chinese companies that went public in the United States that year. Although it encountered a capital chain crisis for more than a year after listing, and there was news of bankruptcy, NIO finally got 7 billion strategic investment through the assistance of Hefei state-owned assets, and got through the difficulties without danger.

First of all, NIO’s substation is one of the important factors of its loss. In the early days of NIO’s establishment, its substation model was regarded by many as its unique selling point, but now, this model has become a burden. It is reported that NIO currently has more than 140 substation, and each substation costs more than 10 million yuan to build. Although this has improved the user experience and brand value, NIO needs to bear huge pressure.

Secondly, as cost growth far outpaced revenue growth, NIO’s gross margin fell sharply. The higher the gross margin, the stronger the profitability and competitive advantage of the company’s products. And NIO’s automotive gross margin suddenly fell from 20.9% to 6.8% in the fourth quarter of 2022, which led to a loss. If we ask the reason for the low gross margin, we can find that the reasons are inventory reserves, accelerated depreciation of production equipment, loss of purchase commitments, and rising battery costs.

In addition to profit pressure, the other end of the deficit isR & DCost. In 2022, NIO’s R & D expenses were 10.836 billion yuan, an increase of 136.0% year-on-year.…At the same time, selling, general and administrative expenses were 10.537 billion yuan, an increase of 53.2% year-on-year. From this point of view, R & D expenses almost doubled, which was the main reason for the increase in expenses, while high sales, general expenses and administrative expenses also contributed to the loss.

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