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NIO Reported Better-than-Estimated Revenues in Q4 2018

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Mar. 7 2019, Published 5:21 p.m. ET

NIO’s Q4 2018 revenue

In the fourth quarter, NIO (NIO) reported net revenue of 3.44 billion Chinese yuan, or ~$500 million, about 134% higher than its revenue of 1.47 million yuan in the third quarter. The company’s fourth-quarter revenues were also better than Wall Street analysts’ estimates of 2.91 billion yuan.

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Revenues by segment

NIO generates its revenues primarily from two sources: vehicles sales and other sales. In the fourth quarter, its vehicle sales revenues were at 3.3 billion yuan (or ~$492 million) as compared to 1.43 billion yuan in the third quarter. At the same time, the company’s other sales revenue rose to 54.4 million yuan in the fourth quarter as compared to 42.7 million yuan in the third quarter.

Key positive factors

It’s important to remember that NIO began deliveries of its first high volume production model ES8 in June 2018. This is the reason why investors should pay attention to the sequential growth in the company’s financials instead of its YoY growth figures.

In the fourth quarter, NIO produced 8,069 units and delivered about 7,980 units of its ES8 vehicle. In the third quarter, the company produced and delivered about 4,206 and 3,268 units of ES8 vehicles. These figures represented 91.8% positive growth in the company’s fourth-quarter vehicle production and a 144.2% growth in its car deliveries.

On March 6, market caps of NIO, Tesla (TSLA), Alibaba (BABA), Tencent Holdings (TCEHY), JD.com (JD), and Baidu (BIDU) were $8.2 billion, $47.7 billion, $477.4 billion, $430.8 billion, $41.6 billion, and $59.5 billion, respectively.

NIO currently sells its cars in the Chinese market (MCHI) only unlike Tesla, which delivers its vehicles in many other countries including European countries and China apart from its home market, the US.

Continue to the next part to learn how NIO’s gross margins looked in the fourth quarter.

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