Estimates: Late Monday Nio, known as the Tesla (TSLA) of China, is likely to narrow net loss to 7 cents per ADS from 39 cents a year ago as revenue soars 148% to $1.01 billion.
Results: Check back after the close.
Nio has already disclosed that Q4 2020 deliveries leapt 111% to 17,353 vehicles, growing for the third straight quarter after the pandemic hit in early 2020. Its new, sporty and youth-oriented EC6 luxury electric crossover outsold two older electric SUVs — the ES8 and ES6 — in December. Sales momentum continued in January, as deliveries increased 352%.
Meanwhile, Nio in January announced the ET7 electric sedan, a Tesla Model 3 rival due next year, and it plans to expand into Europe in 2021. As Nio expands, Wall Street will watch the impact on margins and production costs. Gross margin improved from 8.4% in Q2 to 12.9% in Q3. Vehicle margin improved from 9.7% in Q2 to 14.5% in Q3.
Not least, Nio’s cash balance will be watched as a measure of operational efficiency. At the end of September Nio had $3.3 billion in cash.
Shares gained 5.9% to 48.46 in early Monday stock market trading. Nio stock remains under the 50-day line after a failed breakout past a 57.30 buy point, according to MarketSmith chart analysis. The relative strength line, which compares a stock’s performance vs. the S&P 500, for Nio stock bolted higher in 2019 and 2020 but is now below January 2021 highs.
Among other EV stocks, Li Auto gained 2% Monday and Xpeng Motors (XPEV), which reports March 8, rose 2.4%. Tesla added 1.8%.
Workhorse Group (WKHS) fell 3.1% after a far wider than expected quarterly loss of 78 cents a share. The earnings miss added to woes after the EV-truck maker lost a key contract to make a new generation of USPS mail delivery trucks.
Subsidy cuts and rising competition from tech and legacy auto giants in China are also weighing on Nio stock and its EV peers. Tesla cut the price of its made-in-China Model Y, a rival to Nio’s new EC6 electric crossover. Meanwhile, the global chip shortage could also weight on EV stocks.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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