The Chinese electric car manufacturer Nio has presented its business figures for the second quarter of 2020, which are significantly more positive than expected. Compared to the same period of the previous year, unit sales were up by almost 190 per cent, while sales increased by almost 150 per cent.
For the months of April, May and June the car manufacturer reported a turnover of 526 million dollars. Nio also generated positive operating cash flow for the first time. The gross margin thus amounted to 8.4 per cent; in Q2 2019 it was still minus 12.2 per cent. In net terms, however, Nio is still in the red (-166.5 million dollars). However, the quarterly loss was 64.2 per cent lower than in the prior-year quarter and 30.4 per cent lower than in the first quarter of 2020.
Compared to the same period last year, the company is helped by the fact that deliveries of the ES6 (2,236 units) and ES8 (8,068 vehicles) models are now running much more smoothly. In the first half of 2019, a recall due to potentially defective batteries still had a strong impact on deliveries, as the new batteries had to be installed in existing vehicles as part of the costly recall and were therefore missing from the vehicle factory.
In addition, Nio seems to have overcome the acute financial worries for the time being. When the company presented its figures for the 2019 financial year, it had still expressed doubts about its own future. “The Company’s continuous operation depends on the Company’s capability to obtain sufficient external equity or debt financing,” it was said at the time, because the company’s resources were not enough to secure operations for the next twelve months.
The important and possibly salvaging cash injection had already become concrete in February. At that time, the company had signed a framework agreement with the city government of the provincial capital Hefei. In this agreement, Nio undertook to build factories and research centers in the city. In return, the car manufacturer received a financial commitment of ten billion yuan, or 1.3 billion euros. In July, the credit line was then formally concluded with six domestic banks.
With the quarterly results, the company itself wants to look primarily to the future. Nio is hoping for a sustained positive trend in deliveries in particular. “We achieved a record-high quarterly deliveries of 10,331 ES8 and ES6 vehicles in total in the second quarter of 2020 and expect to deliver 11,000 to 11,500 vehicles in the third quarter as the momentum continues,” says Nio founder William Li.
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