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Key Updates to Watch For in NIO’s Fourth-Quarter Results

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Nov. 20 2020, Updated 5:29 p.m. ET

NIO’s fourth-quarter earnings

Previously, we looked at the top five investors in Chinese electric car company NIO (NIO). NIO currently outsources its vehicle manufacturing to JAC Motors, which could be one reason why it didn’t face the big vehicle production issues or delays faced by US electric carmaker Tesla (TSLA). NIO is set to release its fourth-quarter results tomorrow after markets close. Let’s look at some key updates investors and analysts may watch for in its fourth-quarter results.

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Key updates to watch

NIO started producing its premium SUV, the ES8, last June. By December, the company had delivered 11,348 ES8 units to customers. That month, NIO also launched and started taking pre-orders for its lower-priced SUV model, the ES6, for which priority deliveries are expected to start in June. During its fourth-quarter earnings call, NIO could provide an update on its ES6 production schedule. During NIO’s call, analysts and investors will also likely pay close attention to the company’s vehicle delivery guidance.

According to NIO’s September 2018 Securities and Exchange Commission filing, it is developing a vehicle manufacturing plant in Shanghai that is expected to be functional by the end of 2020. NIO said that it has also started the second construction phase of its manufacturing plant in Nanjing, China. During its fourth-quarter earnings call, NIO might update investors about these plants’ progress. NIO’s 2019 gross margin guidance could also be watched closely.

In February, NIO outperformed the broader market and many of its peers. Last month, NIO stock rose 21.4%, while auto peers Ford (F), Fiat Chrysler (FCAU), Toyota (TM), and Honda (HMC) fell 0.3%, 14.4%, 1.7%, and 6.0%, respectively. General Motors (GM) and Tesla (TSLA) rose 1.2% and 4.2%. Meanwhile, Chinese companies HUYA (HUYA), Alibaba (BABA), Uxin (UXIN), Bilibili (BILI), JD.com (JD), and Tencent Music (TME) rose 23.2%, 8.6%, 3.1%, 11.5%, and 20.5%, respectively. Tencent Holdings (TCEHY) and Baidu (BIDU) fell 4.0% and 5.8%.

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