Chinese electric vehicle (EV) maker Nio Inc. posted better than expected first quarter results, despite being forced to halt production in late March due to the global semiconductor shortage.
Revenues for the three months that ended on Mar 31 climbed 482% from a year ago and 20% quarter-on-quarter to 7,982 million yuan ($1,218 million), according to the firm’s Q1 results announced on Thursday.
Vehicle revenues, which account for 93% of the company’s total, came in at 7,406 million yuan ($1,130 million), representing a 450% year-on-year increase.
The company attributes the increase in vehicle revenues to higher deliveries achieved by offering a more diverse product mix to consumers, the expansion of sales networks and the slow-down of vehicle sales in the pandemic-hit first quarter of 2020.
Nio’s vehicle margin, a measure of profitability, rose to 21% in the first quarter, compared with 17% in the fourth quarter of 2020. The company said the increase was due to more customers buying Nio Pilot, the company’s driving assistance system and upgrading to its 100 kWh battery package subscription plan.
As disclosed earlier in the month, deliveries of Nio vehicles reached 20,060 in the first quarter of 2021, including 4,516 ES8s, 8,088 ES6s and 7,456 EC6s, representing an increase of 423% from the first quarter of 2020 and an increase of 16% from the fourth quarter of 2020.
Currently, Nio makes three vehicle models: The ES8, a 6-seater or 7-seater flagship premium SUV; the ES6, a 5-seater high-performance premium SUV; and the EC6, a 5-seater premium coupe SUV.
The company’s New York-listed shares closed down 5.3% at $38.99 on Thursday trading prior to the release of its Q1 results.
CEO William Li Bin noted in a news release that overall demand for Nio products continues to be strong but the supply chain is “still facing significant challenges”. The company projected 21,000 to 22,000 vehicle deliveries for the second quarter, up an estimated 103%-113% year-on-year and 5%-10% higher than the previous quarter, as well as sales of about $1.3 billion.
Nio, like many other automakers, was forced to halt production at its plant in Hefei this year due to the global semiconductor shortage — an issue that chipmakers have warned will persist at least through the second quarter of 2022.
During an earnings conference call, Li said the firm expects the production suspension to affect vehicle deliveries for April, but added that the ET7, their first sedan, remains on track for its scheduled launch in the first quarter of 2022.
“Going forward, we will continue to invest in new products and core technologies, as well as in our service and power network expansion, particularly battery swapping and charging facilities,” Nio CFO Steven Wei Feng said.
On Tuesday, Nio announced it has invested 50 billion yuan ($7.7 billion) in the construction of an industrial park in collaboration with the Hefei municipal government in Anhui province. Once complete, the campus is expected to house more than 10,000 R&D staff members, 40,000 technical workers and have an annual production capacity of 1 million vehicles and 100 GWh of batteries.
The 11.3-square kilometer facility, named NeoPark, is also expected to generate a gross yearly output of 500 billion yuan ($77.26 billion) in the future, Nio said. Right now, its vehicles are being built in a JAC factory in Hefei.
The company is also aggressively investing in and rolling out its battery swapping technology. This month, Nio signed a partnership with Chinese oil giant Sinopec to set up a power swap station at the latter’s gas filling station.
At the same time, the EV maker is finally announcing its international expansion plan, which will start with Norway. More details are expected to be released during an upcoming press conference scheduled in Oslo on May 6.