“Science and Technology Innovation Board Daily”, November 22 (Reporter Tang Zhixiao) NIO Auto announced its results for the third quarter of 2024.

According to the report data, NIO's revenue for the third quarter of 2024 was 18.67 billion yuan, down 2.1% year on year; gross margin increased 2.1% to 13.1%.

At the business level, NIO's automobile revenue was 16.698 billion yuan, accounting for 89.4% of total revenue, a year-on-year decrease of 4.1%. Vehicle deliveries in the third quarter of 2024 were 61,855 vehicles, up 11.6% year on year and 7.8% month on month. Of these, 61,023 are from NIO and 832 are from the sub-brand Ledao.

According to the performance report data, as of September 30, NIO's free cash flow for the third quarter was positive. The balance of NIO cash and cash equivalents, restricted cash, short-term investments, and long-term term deposits was RMB 42.2 billion. However, NIO's net loss was RMB 4.4126 billion, up 11.6% year on year and narrowing by 2.7% month on month.

Li Bin, founder, chairman, and CEO of NIO, said at the performance conference, “High R&D expenses and the construction of a sales and service system for the 'Electric Exchange County and County Pass' and the Ledao brand have put some pressure on us in the short term. The company is confident that it will continue to narrow losses and achieve full year profits in 2026.

R&D and marketing expenses continued to rise, and the break-even balance was delayed by two years

Among them, R&D expenses and sales, general and administrative expenses increased by 9.2% and 13.8%, respectively, and by 3.1% and 9.3% month-on-month. NIO's R&D team is currently around 11,000 people, maintaining a quarterly R&D investment of around 3 billion yuan.

At the performance meeting, Qu Yu, CFO of NIO, said that the increase in expenses was mainly due to the increase in the pace of new product development and sales network and marketing preparation expenses, and will continue to increase until the fourth quarter.

According to reports, at present, NIO has built 190 Carrefour stores, but Li Bin believes that in terms of regional coverage, it is still insufficient, especially for Tesla and ideal sales channels. “Our goal by the end of the year is still to reach 300 stores and achieve the sales target of 20,000 units in March.”

Qu Yu added that NIO's gross profit target for the fourth quarter remains unchanged at 15%, and a series of smart hardware iterations will be launched next year to boost the overall supply chain, and these “cost reduction” methods will also be used on next year's NIO brand models. “We also have an in-house 'mining' project, which also helps us reduce costs and increase efficiency. By 2025, the gross margin of the NIO brand in 2025 will increase to 20%.”

Earlier, on March 25, 2022, during NIO's 2021 earnings conference call, Li Bin announced: “NIO hopes to achieve full year profit in 2024.” It now appears that this target has been pushed back two years until 2026.

Li Bin said that next year, NIO will enter a new product cycle, and the company is confident that sales will increase 100% next year. “From the perspective of the company as a whole, we still aim to 'achieve full year profit in 2026' as our business goal.”

A new brand will be launched next year, and the layout for the ideal family SUV has been completed

Li Bin said, “Existing models will be iterated on the technology installed in ET9, and new models will be launched one after another next year, including this model for existing models. We expect to complete all product switches and upgrades within two years.”

Regarding whether the Ledao L60 will form a direct competitive relationship with the NIO model, Li Bin admits, “It is true that very few users will choose between NIO and Ledao products, but judging from the data we have obtained so far, there are very few users, about 20%.”

At the 2024 Guangzhou Auto Show, Ledao President Ai Tiecheng said, “Orders for the Ledao L60 far exceeded expectations, and production orders have already been scheduled for the first quarter of next year. As of November 14, the total delivery volume of the Ledao L60 exceeded 7,000 vehicles, and the goal is to deliver more than 10,000 units in a single month in December this year.”

At the performance meeting, Li Bin said that the current climbing pace of the Ledao L60 is also within expectations. Due to subsidies, demand for Ledao is definitely not as hot as in September, but the test drive conversion rate is at a very high level, far higher than NIO cars. This shows that Ledao's products are very competitive in the market where it is located. “For the home SUV market, NIO is also planning to target the ideal L8 and L7 models for medium to large six- and seven-seater SUVs, as well as a large five-seater SUV. Next year, the company will complete the Ledao brand layout.”

It is worth noting that NIO's third brand, Firefly, has also made new progress. According to Li Bin, the brand will be officially released on NIO Day 2024 on December 21. The first model with the same name as the brand will also be unveiled on the same day, and delivery will begin in the first half of 2025.

According to reports, Firefly's position in NIO is equivalent to the BMW Group's MINI brand. It is positioned in the high-end car market, and will be displayed and sold at NIO stores.

NIO's delivery volume for the fourth quarter is expected to be between 0.072-0.075 million, and NIO's total delivery volume in October is 0.021 million units. In other words, in the next two months, NIO will deliver more than 0.051 million units. Judging from the current delivery situation of the Ledao L60, this is not difficult for NIO. Li Bin also stated in the performance report, “NIO's total delivery volume for the fourth quarter is expected to reach a new high. ”