Nio Q4’FY22 Earnings Summary

Summary of their earnings:

- Vehicle deliveries of 40,052, a +26.7% increase q-o-q, or +60% increase y-o-y

- Vehicle margin of 6.8%, a drastic decline from the 16.4% in Q3’FY22, as well as the 20.9% in Q4’FY21 - as impacted by “losses on purchase commitments”, which hints at stiff competition from the likes of BYD and Tesla

- Gross margin of 3.9%, also a significant drop from the 13.3% in Q3’FY22, and the 17.2% in Q4’FY21

After missing earlier delivery guidance of 48,000 (which was revised to 38,000 near the end of the quarter citing “COVID-related supply chain issues”), on top of the stiff competition from auto-rivals such as BYD and Tesla, Nio is all but a victim of pricing power amidst softening consumer demand for discretionary products.

Even though Nio holds a lion share in China’s premium battery electric vehicle market segments (priced over RMB 400K and RMB 300K with the market share of 75.8% and 54.8% respectively in Q4’FY22), Li Auto outsold Nio and XPeng in Q4’FY22. One can only be hopeful for Nio to pick up some steam when 5 of their new models are rolled out in 2023.

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