Nio going global
Nio plans to start selling its cars overseas from the second half of 2021. The company had intended to expand abroad this year but the coronavirus outbreak caused it to push back that plan to next year. Nio plans to make its first international debut in Europe. The company already operates offices in Europe in London and Munich cities.
The company hopes its battery subscription service will make it competitive in international markets against Tesla.
Nio’s loss shrinks as car demand rebounds
Nio is still making losses, unlike Tesla that has become profitable, hence eligible to join the S&P 500 Index. However, Nio’s losses are reducing. The company made a net loss of 1.2 billion yuan in the second quarter of 2020, marking an improvement of more than 64% from a similar period last year. The company’s loss also improved about 41% in the first quarter of 2020 despite the Covid-19 headwinds.
Strong demand for Nio cars continues to drive robust revenue growth, which is in turn enabling bottom line improvements. Nio delivered 14,169 cars in the first half of 2020, nearly doubling from 7,542 deliveries in the first half of 2019. In the second quarter of 2020 alone, Nio delivered 10,331 cars, up from 3,553 in a similar period last year. The strong sales helped drive Nio’s revenue in the second quarter up 146.5% to 3.7 billion yuan.
Nio aims to deliver 11,000 – 11,500 cars in the third quarter. It delivered 3.965 vehicles in August, marking another monthly record. The company expects to generate revenue in the band of 4 billion yuan – 4.2 billion yuan in the quarter.
Nio’s future looks bright in the long-term. Government support, technology advancements, falling prices, and customer interest continue to fuel uptake of electric cars. Global electric car annual sales are forecast to hit 4 million units in 2020, doubling from 2 million units in 2018, according to Deloitte estimates. Annual car sales are forecast to jump to 12 million units in 2025 and then to 21 million units in 2030.
In revenue terms, global electric vehicle market generated $162.3 billion in 2019 and the amount is forecast to grow to $802.8 billion by 2027, according to Allied Market Research. Asia-Pacific, Nio’s home region, currently leads in electric car revenues. Asia-Pacific and Europe accounted for more than 74% of electric car revenue in 2019.
Nio competitors going public and raising funds
Several electric vehicle companies are going public this year to raise funds to finance their development and offer investors more options to participate in the industry. Recent electric vehicle IPO from Nio’s China backyard include Xpeng and Li Auto, which raised $1.5 billion and $1.1 billion, respectively. Already public companies like Nio and Tesla are also seeking to raise more funds. Nio recently raise $1.5 billion through additional share sale. Tesla wants to raise $5 billion through additional stock sale.
More electric vehicle startups are lining up for IPO, including Canoo and Bill Gates-backed QuantumScape.