Weilai’s Q4 revenue has grown positively year-on-year for eleven consecutive quarters, but its net loss has expanded to 5.8 billion yuan, and its gross profit margin has dropped sharply to 3.9%, a year-on-year decrease of more than 10%.
NIO’s stock price in the U.S. stock market soared and fell back. The company’s revenue in the fourth quarter fell short of market expectations, and its net loss expanded to 5.8 billion yuan. The delivery volume in the first quarter of this year is expected to be between 31,000 and 33,000 vehicles. Weilai CEO Li Bin said that Weilai is expected to return to the gross profit rate of 18%-20% this year.
Before the U.S. stock market opened on March 1, NIO announced its 2022 Q4 results. Financial report data show thatWeilai’s Q4 revenue was 16.06 billion yuan, which was lower than the market’s expected 17.1 billion yuan, an increase of 62.2% year-on-year and a quarter-on-quarter increase of 23.5%, showing positive year-on-year growth for eleven consecutive quarters.
The company’s Q4 vehicle sales revenue was 1.475 billion yuan, a year-on-year increase of 60.2%, and a quarter-on-quarter increase of 23.7%; gross profit was 628 million yuan, a year-on-year decrease of 63.4%% and a quarter-on-quarter decrease of 64.2%;Gross profit margin dropped sharply to 3.9%, compared with 17.2% in the fourth quarter of last year and 13.3% in the third quarter; the net loss attributable to the company’s ordinary shareholders was 5.786 billion yuan, a year-on-year increase of -169.9% and a month-on-month increase of -40.8%.
Gross profit margin plummeted in Q4 and is expected to return to the level of 18%-20% this year
In terms of cost, NIO’s sales cost increased significantly this quarter.The cost of sales in Q4 was 15.442 billion yuan, an increase of 88.3% year-on-year and a quarter-on-quarter increase of 37.1%. The company stated that the year-on-year increase in cost of sales was mainly due to (i) delivery volume; (ii) inventory provisions related to existing ES8, ES6 and EC6 models, accelerated depreciation of production facilities and loss of purchase commitments, as these models will be switched to NIO’s second second-generation technology platforms, for which production volumes and deliveries are expected to decrease; and (iii) battery costs per vehicle.
Under the influence of cost growth, Weilai’s gross profit margin also showed a downward trend.The company’s Q4 gross profit margin was 3.9%, a sharp decrease year-on-year and quarter-on-quarter. The company attributed the year-on-year decline in gross profit margin to the decline in gross profit margin of automobiles and the decline in other sales profit margins caused by the high-margin new energy vehicle credit sales in the third quarter of 2022.
In the fourth quarter earnings conference call, Li Bin, CEO of Weilai Automobile, pointed out that Weilai is expected to return to the gross profit rate of 18%-20% this year:
There is indeed a lot of pressure on Weilai’s gross profit margin in the short term. Because Q1 is the conversion period of NIO models to the second-generation platform, the first-generation “886” models and show cars that have been produced need discounts, interest discounts and other measures to clear inventory. In addition, the delivery of Q1 will mainly be ET5 with low gross profit.
In general, the supply of parts this year will not become a bottleneck restricting the delivery volume. In the second quarter, there will be a certain challenge of ramping up production capacity in the early stage of new car delivery, but the pressure on the supply chain will be greatly reduced and will not become a restrictive factor.
In the third quarter, as the delivery of new cars is on the right track, the delivery volume of Weilai cars will increase significantly; at the same time, the current price of lithium carbonate is falling rapidly, and it is expected to drop to about 200,000 in the fourth quarter. Overall, NIO is expected to return to a gross profit margin of 18%-20% this year.
NIO’s research and development expenses maintained rapid growth this quarter,Q4 research and development expenses were RMB 3.981 billion, an increase of 117.7% over the third quarter of 2021 and an increase of 35.2% over the second quarter of 2022. The company stated that the increase was mainly due to the increase in personnel costs for research and development functions and the increase in design and development costs of new products and technologies.
As of December 31, 2022, cash and cash equivalents, restricted cash, short-term investments and long-term time deposits were RMB 45.5 billion (US$6.6 billion).
Regarding the company’s performance this quarter, Li Bin, founder, chairman and CEO of Weilai, said:
NIO delivered 40,052 vehicles in the fourth quarter of 2022, a year-on-year increase of 60%, achieving a new quarterly delivery high. NIO will deliver a total of 122,486 vehicles in 2022, a year-on-year increase of 34%. NIO has become the most competitive high-end brand in China’s smart electric vehicle market. According to the terminal retail data of China Automobile Center, in the fourth quarter of 2022, NIO will be in the segment of high-end pure electric vehicles above RMB 400,000 and RMB 300,000. The sub-market share is 75.8% and 54.8%, respectively, ranking first.
In 2022, we will make positive progress in core technology and advantageous product research and development, infrastructure deployment and global market expansion, laying a solid foundation for the company’s long-term development.
In 2023, we plan to launch five new products based on NIO’s second-generation technology platform, and add 1,000 battery swap stations to further enhance the overall user experience and continue to consolidate our competitive advantage in key areas of smart electric vehicles.
The delivery volume in the first quarter is expected to be between 31,000 and 33,000
In terms of vehicle delivery,In Q4, NIO delivered 40,052 vehicles, including 20,824 high-end smart electric SUVs and 19,228 high-end smart electric cars, a year-on-year increase of 60% and a quarter-on-quarter increase of 26.7%. In 2022, Weilai delivered a total of 122,486 new cars, a year-on-year increase of 34%.
At the same time, Weilai announced the delivery volume in February 2023, with 12,157 new cars delivered, a month-on-month increase of 42.9% and a year-on-year increase of 98.3%. From January to February this year, Weilai delivered a total of 20,663 new cars, a year-on-year increase of 30.9%.
In terms of financial guidance, Weilai currently expects that the vehicle delivery volume in the first quarter of 2023 will be between 31,000 and 33,000 vehicles, an increase of approximately 20.3%-28.1% year-on-year; the revenue guidance is 10.62 billion yuan-11.54 billion yuan, a year-on-year An increase of about 10.2%-16.5%.
After the financial report was released, the pre-market gains of NIO’s U.S. stocks narrowed to 1%, after rising nearly 7% before.
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