Category: Nio

NIO CFO says confident of meeting this year’s sales target

That will be achieved through new models, expanding the company's charging and battery swap network, and unlocking technology, the CFO said.  |  NIO US | NIO HK | NIO SG

An NIO (NYSE: NIO) executive re-emphasized the electric vehicle (EV) maker's confidence that it will meet its goal of doubling sales this year, at a time when the Chinese auto industry has been weak overall so far this year.

"We are very confident to achieve our sales target in 2023," NIO CFO Steven Feng said in an interview with Bloomberg TV today.

That will be achieved through new models, expanding the company's charging and battery swap network, and unlocking self-driving technology, Feng said.

NIO delivered a total of 122,486 vehicles in 2022, up 34 percent from 91,429 vehicles in 2021.

William Li, the company's founder, chairman and CEO, said during a March 1 analyst call after NIO reported its fourth-quarter earnings that the company aims to see sales double this year compared with last year.

"Our team is very confident in that," Li said at the time.

If raw material prices fall in line with current trends, and without considering the investment in innovative businesses, NIO could still be profitable in the fourth quarter of this year, Li said earlier.

Feng mentioned in the interview with Bloomberg TV today that the company is "confident" of breaking even at the group level next year.

Strong revenue growth and tighter expenses are key to improving profitability, he said.

Feng also mentioned the ongoing price war in the auto industry in the interview, saying it showed there were too many carmakers in China.

"We expect the industry to go through some profound consolidation," Feng said."It's almost consensus that China now has too many automakers, but we have no plan to buy anyone."

NIO's shares traded in Hong Kong surged in early trading today, rising more than 7 percent to HK$74.25 at press time, bringing its gains over the past two days to about 17 percent.

Sales performance in China's auto market has been weak overall so far this year, with cumulative retail sales of all passenger vehicles from January to February at 2.68 million units, down 19.8 percent year-on-year, according to data released earlier this month by the China Passenger Car Association (CPCA).

Retail sales of NEVs in China in the first two months were 770,000 units, up 23.31 percent year-on-year.

China's auto market remained weak heading into March, and the ongoing price war has brought disruptions to the sector.

In terms of insurance registrations, China's passenger car sales for the month were 630,000 units as of March 19, down 2.53 percent year-on-year, according to data monitored by CnEVPost.

Among them, insurance registrations of NEVs for the month were 220,000 units, up 12.34 percent year-on-year.

China NEV insurance registrations for week ending Mar 19: BYD 38,414, Tesla 18,712, NIO 1,775

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China NEV insurance registrations for week ending Mar 19: BYD 38,414, Tesla 18,712, NIO 1,775

Insurance registrations for China's NEVs were 113,000 last week, up from 108,000 the week before.

Insurance registrations for new energy vehicles (NEVs) in China increased last week compared to the previous week, with a mixed performance from major EV makers.

From March 13 to March 19, insurance registrations for all passenger vehicles in China were 321,000 units, up from 308,000 units the previous week, according to figures shared by several car bloggers on Weibo.

Insurance registrations for NEVs were 113,000 last week, up from 108,000 the week before.

(OTCMKTS: BYDDY) vehicles continued to see the most insurance registrations, with 38,414 last week, up from 37,141 the previous week.

(NASDAQ: TSLA) vehicles saw 18,712 insurance registrations last week, up from 17,032 the week before.

was 1,775 vehicles last week, down from 2,170 the week before.

NIO guided for first-quarter deliveries between 31,000 and 33,000 units earlier this month, meaning March deliveries are expected to be between 10,337 and 12,337 units.

The company's insurance registrations for the first week of March, which included February 27 and February 28, were 3,345 units.

(NASDAQ: LI) vehicles registered 5,438 insurance units last week, up from 4,243 the previous week.

(NYSE: XPEV) had 1,296 vehicles last week, down from 1,635 the week before.

posted 914 units last week, down from 1,043 units the previous week.

China NEV insurance registrations for week ending Mar 12: BYD 37,141, Tesla 17,032, NIO 2,170

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China EV industry sell-off creates opportunity, says Morgan Stanley

leads the pack with superior execution, but risk-reward increasingly favors and after a drastic sell-off this year, Morgan Stanley said.

Shares of major Chinese electric vehicle (EV) makers have generally suffered a sell-off so far this year, as the sector's weak sales at the start of the year and recent widespread price wars have raised investor concerns.

However, in Morgan Stanley's view, the sales potential of China's EV companies in the second half of the year is underestimated at a time when costs are sliding.

"We think YTD stock corrections should have discounted competition risks but underrate the cost-driven upside to EV margin/volume in 2H, " Morgan Stanley analyst Tim Hsiao's team said in a research note sent to investors on March 19.

As of Monday's close, NIO's (NYSE: NIO) US-traded ADR was down 10 percent this year, XPeng was down 8 percent, and Li Auto was up about 12 percent.

Hsiao's team believes that significant margin pressure from price wars will fuel market concerns about industry profitability and cash flow, especially among new energy vehicle (NEV) heavyweights, namely and China, which can afford to initiate another round of price cuts in the second quarter.

That, combined with weak full-year sales following the stimulus withdrawal, could dampen sales volumes and margins for EV brands in the first half of 2023, the team said.

Still, the production potential of China's NEV industry in the second half of the year and beyond appears to be underestimated as the decline in prices of batteries and key components accelerates following aggressive capacity expansion in 2022, the team noted.

This could translate into potential margin relief for NEV makers and potentially increase NEV penetration in the second half of the year in a cost-effective manner, the team said.

Hsiao's team estimates a 20-25 percent drop in battery costs for major NEV makers, implying a 6-10 percentage point cost savings.

The price drop of lithium carbonate, a key raw material for batteries, has accelerated in recent days and saw its biggest one-day drop so far this year on March 20, according to a CnEVPost report yesterday.

The average price of both industrial-grade lithium carbonate and battery-grade lithium carbonate fell by RMB 12,500 per ton on March 20, with the latest average price at RMB 272,500 per ton and RMB 312,500 per ton, respectively.

NIO's management said in a call with analysts after the March 1 earnings announcement that they expect lithium carbonate prices to fall back to around RMB 200,000 per ton this year, boosting gross margins back up.

EV makers that can take full advantage of this will not only enjoy margin relief, but also have more flexibility to price their models to further boost NEV penetration in mass markets and lower-tier cities, Hsiao's team wrote in their report.

"That said, the tailwinds from falling input costs may take time to kick in as our checks with major OEMs suggest they are still in discussions with battery suppliers on new terms," the team added.

The team believes that a tougher operating environment will accelerate market reshuffling, with leading EV manufacturers weathering the downturn better than their peers, while the growth of smaller, lagging EV startups could be slowed by a depletion of liquidity in 2023.

Growing investments should also push up cash burn rates. As a result, the ability to optimize working capital and access to market funding will play a more important role in ongoing operations in 2023, the team added.

"Our analysis suggests EV trio (NIO, XPeng, and Li Auto) will still hold fast, backed by healthy balance sheet conditions and better connections to capital markets," Hsiao's team wrote.

The team said they're fully aware of investor worries about EV startups' cash burn that may rapidly deplete their liquidity.

But they believe the EV trio can remain self-funded for the next 18 months, even under the stress-test scenario of a prolonged price war.

"We believe continuous investment would further solidify their technology leadership and enable them to have a better chance of winning out in the next up-cycle," the team wrote.

The team believes that trough valuations mean the market has lowered expectations for EV startups' operational performance and financial resilience in an industry downturn, making any marginal improvement in their sales a meaningful stock catalyst.

Li Auto leads the pack with superior execution, but risk-reward increasingly favors XPeng and NIO after this year's sharp dip, the team said.

Lithium prices see biggest drop this year in China as decline accelerates

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NIO’s 1st 3rd-gen swap stations to go live on Mar 28

's third-generation battery swap stations are expected to be ready for volume production in April, with deployment ramping up in May, William Li said a month ago.  |  NIO US | NIO HK | NIO SG

(Image credit: NIO)

NIO (NYSE: NIO) will officially bring its first third-generation battery swap stations online at the end of this month, a timeline that appears to be slightly earlier than it previously announced.

On March 28, NIO's first 10 third-generation battery swap stations will go live, the company said in an article posted today on its mobile app.

The article does not provide more information on the third-generation stations, but said that 10 special guests will be on-site to see the battery swap stations on their wish list delivered.

NIO officially unveiled the third-generation battery swap station at NIO Day 2022 on December 24, 2022, capable of storing up to 21 battery packs, up from 13 in its predecessor generation and five in the first generation of the facility.

The third-generation battery swap station increases the daily service capacity of a single station to 408 times, a 30 percent increase over the second generation.

Notably, NIO also equipped two LiDARs and two Nvidia Orin chips on the third-generation battery swap station, for a total computing power of 508 TOPS.

The company then announced plans to add 400 battery swap stations in 2023, but that plan was raised to 1,000 a month ago.

William Li, founder, chairman and CEO of NIO, said on February 21 that NIO will further accelerate the deployment of battery swap stations, aiming to have a cumulative total of more than 2,300 battery swap stations by the end of 2023.

Mass production of NIO's third-generation battery swap stations was well underway, with volume production expected to begin in April and deployment accelerating in May, Li said at the time.

Starting in June, NIO will basically maintain a construction rate of 120-150 battery swap stations per month, he said.

On February 28, the NIO App added a wish list feature that allows vehicle owners to provide suggestions for where they would like battery swap stations to be located to support faster buildout.

To date, NIO has received 132,238 wish lists for battery swap stations, according to the article in the NIO App today.

Of those, 68.3 percent want the planned new battery swap stations this year to be located in urban areas, and 31.27 percent want the facilities to be located along highways.

Beijing was the most mentioned city on these wish lists, followed by Shanghai and Suzhou.

There were 240 potential sites covering more than 50 users and 12 sites covering more than 200 users, NIO said.

After receiving the owners' wish lists, NIO held 221 events in 134 cities, meeting with 6,459 users face-to-face, according to the article in the NIO App.

NIO has not added any battery swap stations in the past half month. As of March 5, the company had 1,321 such facilities in China, according to data monitored by CnEVPost.

NIO reveals aggressive plan to add 1,000 swap stations in 2023

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Vlogger ordered to apologize and pay damages to NIO for spreading false info

The vlogger was ordered to publish an apology on his channel and pay financial damages of RMB 80,000 yuan ($11,640).  |  NIO US | NIO HK | NIO SG

(Image credit: CnEVPost)

NIO (NYSE: NIO) has won a lawsuit involving reputation infringement in China, in one of the company's rare tough moves.

Laotan Shuoche (literally, Mr. Tan talks about cars), a vlogger on the short-video platform Douyin, was ruled to have infringed on NIO's reputation and was required to publish an apology on his channel and pay financial damages of RMB 80,000 yuan ($11,640).

The vlogger had called NIO's vehicles uncontrolled "wild horses" on his channel and blamed an accident on the quality of NIO's vehicle, even though traffic police authorities had confirmed that the accident was caused by the driver's mishandling, several local media said, citing a verdict.

The vlogger spliced multiple unverified collision videos to cause damage to NIO's reputation by distorting the facts while gaining viewers, according to the verdict, which is final.

Last February, an NIO vehicle was rear-ended on a highway in Jinhua, Zhejiang province in eastern China, and eventually crashed into three other vehicles before coming to a stop after driving forward for about 2 kilometers.

Laotan has apologized to NIO by posting a video on his Douyin account, which showed that he posted the video on the accident on February 16, 2022.

In China, NIO has always been seen as showing caution and restraint in dealing with similar issues, rather than being as aggressive as .

A few years ago, a video by a blogger criticizing NIO gained high attention. However, his video was not seen as an infringement of NIO's reputation, and he himself became one of the earliest owners of the ET7.

On June 30, 2022, car blogger @一个菜两个菜, who has more than 1 million followers on Weibo, said he purchased an ET7, a model that only started to be delivered at the end of March last year.

The blogger claimed in a video posted on January 28, 2019, that there is no future for NIO and explained his view in detail.

He claimed in the video at the time that NIO was playing a game of quick money through the capital markets and was not capable of building cars.

($1= RMB 6.8707)

Blogger who said NIO had no future three years ago becomes one of the first ET7 owners

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Tesla parts supplier Ningbo Tuopu signs cooperation deal with NIO

Ningbo Tuopu said its strategic partnership with uses an innovative T0.5 collaboration model that will provide the latter with better products and services.

NIO US | NIO HK | NIO SG

(Image credit: CnEVPost)

Ningbo Tuopu Group, a parts supplier, has signed an agreement with NIO (NYSE: NIO) in which the two companies will adopt an innovative partnership model not commonly seen in the automotive industry.

Ningbo Tuopu and NIO signed a strategic cooperation framework agreement on March 16 to establish a strategic partnership for the development, manufacture and supply of new energy vehicle components, according to an exchange announcement today from the Shanghai-listed company.

One of the goals of the partnership is for Ningbo Tuopu to supply parts near NIO's plants in Hefei, according to the announcement.

The companies will also collaborate on the use of low-carbon materials, supply chain emissions reduction, digital supply chain and global business exploration.

For the current phase, Ningbo Tuopu will collaborate strategically with NIO on products including chassis systems, body lightweight, thermal management systems, interior and exterior systems and NVH (noise, vibration, and harshness) damping systems.

The two companies will also explore all-round cooperation in the areas of intelligent cabin components, air suspension systems and intelligent driving systems, the announcement said.

The teams of both parties will establish regular communication mechanisms and provide adequate resource support to ensure the implementation of the strategic cooperation, according to the announcement.

Notably, Ningbo Tuopu said its strategic partnership with NIO is based on an innovative T0.5 supply chain cooperation model, which will provide the customer products and services with better QSTP (Quality, Service, Technology, Price).

Ningbo Tuopu did not explain more about the T0.5 partnership model, but it is a new model it has been working on for the past few years.

In the automotive industry, the typical relationship between parts suppliers and automakers is T1 (Tier 1), a supplier that signs a supply contract directly with the car company, and T2 (Tier 2), which has a contract with a T1 supplier.

In the T0.5 model implemented by Ningbo Tuopu, automakers are more involved in the development of components, thus shortening the development cycle and ensuring quality.

Ningbo Tuopu was founded in 1983 and is one of the largest parts suppliers in China. The company last came to the attention of the general public in China because of a recall of the Tesla Model Y.

In December 2021, Tesla announced a recall of 21,599 China-made Model Y electric vehicles because of the risk of warping or breaking the vehicle's steering knuckle, which was supplied by Ningbo Tuopu.

Following the announcement of the Tesla Model Y recall, Ningbo Tuopu's shares traded in Shanghai were at one point severely sold off.

The parts maker later issued a statement saying that the products involved in the recall were only for the Model Y and not for other Tesla models or other customers' models.

The company estimated that the recall was not material and would not have an impact on its annual operating results or on its business based on the number of recalls and defect ratios, it said in the statement at the time.

NIO won't get involved in price war, exec says

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CATL to reach new price agreement with automakers as soon as end of Mar, report says

The price of lithium, a raw material for batteries, has accelerated its decline, with industrial-grade lithium carbonate falling RMB 7,500 per ton to RMB 302,500 per ton today.

New price agreements between Chinese power battery giant and some local automakers are expected to be reached this month, at a time when battery raw material prices continue to fall.

CATL's lithium rebate policy is progressing steadily, and it is now at the practical stage of signing agreements with some car companies, local media Cailian said today, citing sources close to the battery maker.

These agreements are expected to be reached by the end of this month at the earliest, the source said.

CATL's plan was first reported on February 17 by local media outlet 36kr, which said it is not aimed at all customers, but rather at several strategic customers, including (NYSE: NIO), (NASDAQ: LI), and .

The core terms of the partnership include that CATL will settle a portion of the price of power battery supply with car companies at a rate of RMB 200,000 ($28,970) per ton of lithium carbonate for the next three years.

At the same time, car companies signing the partnership will be required to commit about 80 percent of their battery purchases to CATL, according to the report.

CATL management first acknowledged the move during the company's earnings call on March 9.

CATL's lithium sharing plan is not for the purpose of lowering prices, but rather the company already has some mineral resources and does not want to reap windfall profits, its management said.

CATL wants to be able to share with long-term strategic customers and is moving forward with communications to that end, the company said.

Prior to that, Li Auto and NIO both said that they had ongoing discussions with CATL when asked about the topic in their respective earnings calls.

CATL's move comes as lithium carbonate has been falling for months.

Today's quotes for industrial-grade lithium carbonate and battery-grade lithium carbonate in China were both down RMB 7,500 per ton, with the latest average prices at RMB302,500 per ton and RMB 340,000 per ton, respectively, according to My Steel.

($1 = RMB 6.9040)

CATL confirms it's negotiating new prices with EV makers

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NIO won’t get involved in price war, exec says

China's auto industry is facing cyclical swings in the transition to electrification that can't be weathered by price wars and require automakers to stick to brand values, an executive said.

NIO US | NIO HK | NIO SG

An NIO (NYSE: NIO) executive said the company won't get involved in a price war, which has come into focus with the recent sharp price cuts by a large number of internal combustion engine (ICE) automakers.

NIO will not engage in a price war and will not respond to the current market volatility with price cuts, said Pu Yang, the company's assistant vice president of sales operations, at a media briefing today.

NIO believes that the current wave of price cuts is a cyclical fluctuation in the transition from ICE vehicles to smart electric vehicles (EVs), with the main players being ICE models from joint venture brands with limited competitiveness, Pu said, according to minutes shared by several automotive bloggers.

The cyclical fluctuations brought about by this technological revolution can't be crossed by price wars and require car companies to stick to their brand values, he said.

NIO will always ensure the user experience and cope with this cycle by efforts including continuous investment in infrastructure, keeping prices and configurations stable, and full-stack in-house research and development, he said.

More and more car companies are joining the price war, leading to an increased wait-and-see sentiment among consumers to avoid seeing price cuts soon after purchasing a car.

NIO's local counterpart, (NASDAQ: LI), has introduced a consumer price-protection benefit that will refund the difference if the price drops within 90 days of their purchase.

Pu said he saw Li Auto's move and that NIO had considered whether to issue a similar policy, but for the company, it had previously made it clear that prices would not go down.

Not only is NIO not dropping prices for 90 days, but prices won't change for a longer period of time, he said.

He believes the current plunge in ICE vehicle prices in China will be a landmark event and potentially a watershed moment for the auto industry as a whole.

Many of the products that have seen significant price cuts are at the end of their life cycle, Pu said, adding that he doesn't think that will be the norm.

He believes that the large number of models that have seen significant price cuts are appearing quickly, and that these moves will disappear quickly, and that this will be some sort of catalyst for the development of the new energy vehicle (NEV) market.

Pu is optimistic about the whole-year performance of the passenger car market in China, and believes that sales will increase compared to last year.

He mentioned that NIO has seen an increase in the number of visitors to its stores and test drives in recent times, and is confident of growth given the new products the company will have available and the upcoming Shanghai auto show.

The NIO brand will not make prices lower by introducing single-motor models or models without LiDARs, Pu said, reiterating remarks made by William Li, the company's founder, chairman and CEO, during an earnings call earlier this month.

Lower configurations and lower prices are not how NIO wins. The company started from the beginning with a desire to give users a highly configurable, high-quality-of-service experience, he said.

Pu said he suggested to the company's management at the time of the ET5's launch that it could lower the barrier to purchase by eliminating the free battery swap benefit, but that was voted by Li.

The ET5 is a good value when compared to competitors in the same price range as it, especially in terms of intelligence and performance, he said.

NIO believes that improving service quality will be an effective means of dealing with the competition, including adding 1,000 new battery swap stations this year, he said.

The penetration rate of NEVs in China will be higher this year, and the total market segment of high-end EVs will be larger, so NIO is expected to achieve better growth, Pu said.

New products will be an important card for NIO this year, as the company will have more core products on the market this year and delivery is expected to be smoother, he said.

As for the lower-priced EV market, NIO will cover it through sub-brands, including one codenamed ALPS, he said.

China auto price war: BMW dealers offer discounts of up to $14,360 for i3

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