Chinese automobile manufacturer NIO rescheduled its conference call for the second quarter (Q2) of 2019 on September 25, clarifying that the company only lost 22 billion yuan ($3.1 billion) instead of the rumored $5 billion.
NIO CFO Xie Dongying claimed at the beginning of the call that the company would not answer anything related to fundraising or cash flow, as it is in the process of various financing plans.
Regarding vehicle deliveries in Q2, CEO Li Bin was satisfied with NIO’s performance, considering the general slowdown of Chinese automobile market and fierce competition among premium brands. He was also confident in the model ES6’s competitive power after reviewing the market and customers’ demand.
As for how to improve NIO’s profitability, Xie said that selling more cars is undoubtedly beneficial for the profit margin. However, the profit margin is primarily determined by the production and shipping costs. “We expect the profit margin in the third and fourth quarter to remain negative,” Xie said.
The upcoming release of the ES6 in late September will have a lower profit margin as it has a lower price and few customization options. Another version of the ES8 will have a comparatively higher profit margin, according to Xie.
To improve the deficit, Xie said the company is optimizing its talent structure, evidenced by the company cutting the number of employees to 7,800 in late October.
One day before the conference call, NIO released their earnings report but canceled the original conference call on the same day without any detailed explanation. After the report went out, their stock price dropped by 20.22% to $2.17.