Nio's Record Loss in Q4 2024

Nio, the prominent electric vehicle manufacturer, reported a staggering net loss of RMB 7.11 billion (approximately $974 million) in the fourth quarter of 2024, marking a significant increase of 40.6% compared to the third quarter and a year-on-year rise of 32.5%. This financial slump primarily stemmed from soaring selling, general, and administrative (SG&A) expenses, which hit a record high during the same period.

Financial Stability and Liquidity Concerns

Despite these challenges, Nio emphasized that it possesses adequate funds to sustain its operations for the next year, even though its current liabilities surpassed its current assets as of December 31, 2024. This situation raises concerns about liquidity, but Nio maintains confidence in its financial strategy moving forward.

Adjusted Net Loss and Currency Depreciation Impact

Furthermore, the electric vehicle maker reported an adjusted non-GAAP net loss of RMB 6.62 billion, which reflects a year-on-year increase of 37.9% and a 50.1% increase from the previous quarter. Additional losses, amounting to RMB 527.5 million, were attributed to the depreciation of the RMB against the US dollar, adversely affecting overseas asset valuations.

Q4 Revenue and Vehicle Sales Performance

On a brighter note, Nio’s revenue for Q4 reached RMB 19.7 billion, narrowly aligning with its earlier forecasts of RMB 19.68 billion to RMB 20.38 billion. This figure signifies a healthy year-on-year growth of 15.2% and a 5.5% increase from the prior quarter. The surge in vehicle sales revenue, which amounted to RMB 17.48 billion, benefited from increased deliveries and improved sales figures — despite the average selling price decline due to a shift in product mix.

Record Vehicle Deliveries and Ancillary Sales

In total, Nio successfully delivered a record 72,689 vehicles in the fourth quarter, maintaining its predictions of between 72,000 and 75,000 units. This achievement represents a remarkable year-on-year increase of 45.25% and a 17.52% uplift compared to Q3. The company also reported ancillary sales of RMB 2.23 billion, influenced by a rise in parts and aftermarket services.

Cost of Sales and Gross Profit Improvement

Nio’s cost of sales was RMB 17.39 billion, increasing 9.9% year-on-year but reflecting the company’s effective strategies to reduce material costs per vehicle. Encouragingly, Nio’s gross profit totaled RMB 2.31 billion, a substantial 80.5% increase year-on-year and a 15% rise from the previous quarter, with the overall gross margin improving to 11.7%. This enhancement in margins was largely fueled by higher profit margins on technology and after-sales services.

High R&D and SG&A Expenses

However, the company's R&D expenses remained high at RMB 3.64 billion, although this reflects an 8.5% decrease year-on-year — signaling potential efficiencies in innovation strategies. With SG&A expenses ballooning to a record RMB 4.88 billion, reflecting a worrying trend with a 22.8% year-over-year rise, the company noted that these costs were driven by robust marketing activities and expansion of sales and service networks to support new product lines.

Outlook for Future Deliveries and Revenue