- NIO’s reported 2Q22 losses were wider than expected, as vehicle gross margins declined further on higher battery costs. Encouragingly, management expects margins to improve slightly in 3Q22.
- NIO delivered 25,059 vehicles in 2Q22, a decline from the previous quarter. Deliveries in 3Q22 is expected to remain fairly weak at 31,000 to 33,000 vehicles due to supply chain hiccups.
- On a more positive note, NIO has maintained its guidance for 100,000 vehicles to be delivered in 2H22, suggesting deliveries will “break record every month” in 4Q22. This is driven by an easing of supply chain constraints as well as ramp up of ET5 production.
- To achieve that NIO would have to ensure that there are no further unexpected production disruptions for the rest of the year. Investors looking at the long-term potential of the Chinese EV market can also look at a diversified ETF.
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