Chinese electric vehicle maker NIO reported fourth-quarter figures on Monday night, with the usual quarterly earnings conference call held shortly after.
The conference call themes, however, were anything but typical.
(ticker: NIO) Management addressed everything from the electric vehicle supply chain to new driving technologies and expanding sales in foreign markets.
There are five key things that NIO management said Monday night, along with some recent background.
NIO can now produce 7,500 units per month. “Our partner JAC has already started further expansion of production capacity at the Hefei plant and plans to expand annual production capacity to 150,000 units in one shift and 300,000 units in two shifts to prepare for the production of ET7 and future products. “added a company spokesperson.
JAC is a Chinese automotive company that NIO has partnered with to provide manufacturing and assembly support. The ET7 is NIO’s new luxury sedan, arriving in a few quarters.
NIO said it plans to deliver roughly 20,000 vehicles in the first quarter of 2021. January deliveries were more than 7,200, slightly less than the roughly 7,400 cars per month it needs to produce in the final nine months of 2021 to meet current expectations. of the analysts. .
Supply chain constraints
Parts supply issues could make it difficult for the company to reach those production numbers. Management commented on the global chip shortage affecting the auto market lately.
General Motors (GM)
said the lack of chips would represent a gain of a billion dollars against in 2021.
NIO said it had enough chips for its Q1 and Q2 production, but the risk of chip shortages remains “pretty high.”
The threat of electric vehicle battery shortages could also affect second quarter production, but should not prevent NIO from producing 7,500 vehicles a month until the end of June.
NIO also updated investors on its battery-as-a-service initiative. NIO will essentially sell a car without charging the battery. Car drivers will pay a monthly fee for batteries and charging. It’s a bit like the ongoing cost of gasoline for vehicles powered by internal combustion engines.
The customer “acceptance rate” in battery service is 55% and is growing every month. NIO said.
Batteries won’t be the only recurring revenue NIO generates. The company is also considering autonomous driving as a service. Customers will pay monthly fees to access its leading autonomous driving software.
Providing autonomous driving through a subscription is a new idea. Even Tesla (TSLA) charges a one-time fee for its full autonomous driving mode feature. Another automotive executive is sure to watch the NIO launch go.
Executives will also be on the lookout for NIO’s expansion abroad. European expansion looks imminent, but management said an expansion in the US will require “a lot of patience.”
NIO bulls will be encouraged by what they heard Monday night, but overall, investors seem disappointed. NIO shares fell about 5% in pre-market trading. S&P 500 and Dow Jones Industrial Average futures were down about 0.1%.
Investors have high expectations for NIO and even good results can disappoint. The stock is trading about 14 times estimated sales in 2021, compared to about 4.4 times for the Russell 1000 Growth Index.
The stock fell the day after its last four earnings reports, but the stock rallied quickly. NIO’s shares increased approximately 1,100% over the past year.
Write Al Root at [email protected]