Shanghai (ZXZC)- NIO Inc., a Chinese front-runner in the high-end smart electric vehicle sector, reported a decrease in total revenues and vehicle sales for first quarter (Q1) 2023 compared to the previous quarter, but still recorded a year-on-year increase in total revenues. The unaudited results released today showed a 33.5% drop in revenues from Q4 2022 and a 7.7% increase from Q1 2022, totaling 10,676.5 million yuan (US$1,554.6 million).

The company’s Q1 2023 vehicle sales dipped to 9,224.5 million yuan (US$1,343.2 million), dipping 37.5% from Q4 2022, and slightly down 0.2% from Q1 2022. The sales slump over the previous year's first quarter was primarily due to lower average selling prices driven by a higher proportion of ET5 and 75 kWh standard-range battery pack deliveries, partially compensated by an increase in delivery volume. 

NIO's delivery center in Nanxiang district; photo credit: NIO

The gross profit for Q1 2023 fell drastically by 88.8% year-on-year and 73.9% quarter-on-quarter to 162.3 million yuan (US$23.6 million). This was mirrored by a significant drop in gross margins and vehicle margins.

The gross margin of 1.5% in Q1 2023 represents a sharp decrease from 14.6% in Q1 2022 and 3.9% in Q4 2022, mainly due to a reduced vehicle margin.

The vehicle margin for Q1 2023 stood at 5.1%, down from 18.1% in Q1 2022 and 6.8% in Q4 2022. The YoY decrease in vehicle margin were mainly attributed to changes in product mix and increased battery cost per unit, while the QoQ drop was primarily due to (i) changes in product mix, and (ii) increased promotion discount for the previous generation of ES8, ES6 and EC6, which were partially offset by (iii) the inventory provisions, accelerated depreciation on production facilities, and losses on purchase commitments for the previous generation of ES8, ES6 and EC6 in the fourth quarter of 2022.

Research and development expenses rose by 74.6% year-on-year to 3,075.6 million yuan (US$447.8 million), despite a 22.7% decrease from the previous quarter.

NIO's net loss in Q1 2023 ballooned by 165.9% from Q1 2022 to 4,739.5 million yuan (US$690.1 million), although it represented an 18.1% decrease from Q4 2022.

NIO's cash balance, inclusive of restricted cash, short-term investment, and long-term time deposits stood at 37.8 billion yuan (US$5.5 billion) as of March 31, 2023.

Looking ahead, NIO anticipates a YoY decrease in both deliveries and total revenues in Q2 2023. Its vehicle deliveries expected to be between 23,000 and 25,000 units in the Apr.-Jun. period, marking a decrease of approximately 8.2% to 0.2% from Q2 2022. The company also estimates total revenues to fall 15.1% to 9.0% from the year-ago period, landing between 8,742 million yuan (US$1,273 million) and 9,370 million yuan (US$1,364 million).