On March 5, NIO announced its financial results for the fourth quarter and full year of 2023. For the whole of last year, NIO's revenue was 55.6 billion yuan, a year-on-year increase of 129%；Vehicle deliveries reached 160,000 units, a year-on-year increase of 307%。In the fourth quarter of 2023, NIO's revenue was 17.1 billion yuan, a year-on-year increase of 65%。
However, while revenue and deliveries increased, net loss and gross margin regressed. Last year, NIO's net loss widened by 4355% to 207200 million yuan, gross profit margin decreased by 49 percentage points to 55%。Although NIO still has 57.3 billion yuan in cash equivalents reserves, it is still 57.3 billion yuanThe debt of 900 million yuan seems to be a drop in the bucket.
Zhang Si (pseudonym), an investment banking analyst, told Xinxin New Technology that with NIO's current cash reserves, there is no problem in surviving in the short term, but it is uncertain in the long term.
After March, the weather warms up, and the sales situation will get better and better. "So in the rest of 2024, will NIO be able to recover as Li Bin expects?
Refuse to fight
Last year, NIO's revenue was able to achieve 12The 9% year-on-year increase was due to an increase in vehicle deliveries. According to the financial report, in the whole of last year, NIO delivered 160038 vehicles, a year-on-year increase of 307%, of which 50,045 vehicles were delivered in the fourth quarter, a year-on-year increase of 25% and a decrease of 9 quarter-on-quarter7%。
In the face of the serious market situation of involution last year, NIO accelerated the pace of new product launches, and not only completed the upgrading of all products last year, but also launched two new models, ET5T and ET9. On the other hand, NIO has also taken a number of other measures to improve its sales and profitability. For example, in June last year, the price of all NIO models was reduced by 30,000 yuan, the rights and interests of battery swapping continued to decline, the scale of sales personnel was expanded, the sales process was optimized, and the battery swap business cooperation was opened to many car companies.
The price reduction** policy has led to an increase in deliveries, which in turn has increased operating income, but the decline in the average price of vehicles also means that gross profit margin will inevitably decline. According to the financial report, NIO's gross profit margin was 55%, a decrease of 49 percentage points, including a gross margin of 7 in the fourth quarter5%, a decrease of 05 percentage points.
Li Xiang, CEO of Li Auto, believes that the gross profit margin of luxury car brands should exceed 40%, while car companies that adopt the direct sales model can only operate healthily if the gross profit margin is maintained at more than 20%. For the whole of last year, Li Auto's gross profit margin reached 235%, and there are two other car companies in the world with a gross profit margin of more than 20%, namely BYD and Tesla.
And in the face of more fierce competition in 2024, how to balance gross profit margin and sales volume in the first battle? "The NIO brand will not produce cheaper models than ET5, will not exchange ** for sales, and we will pursue and pay more attention to gross profit. Li Bin said. As for this year's gross profit margin target, Feng Wei, chief financial officer of NIO, said that it will remain at 15% to 18%.
A huge loss of 20 billion
However, although NIO has achieved growth in operating income and vehicle deliveries in 2023, its net loss for the whole of last year has not narrowed, about 6.3 billion yuan more than in 2022, with a total loss of 207200 million yuan, of which the net loss in the fourth quarter reached 53700 million yuan, a year-on-year decrease of 72%。
In fact, NIO has lost more than 86 billion yuan in the past six years, and it is very difficult to turn losses into profits due to the huge investment in R&D and sales. According to the financial report, NIO's R&D expenses for the whole of last year were 134300 million yuan, a year-on-year increase of 239%；Selling, general and administrative expenses were $128800 million yuan, a year-on-year increase of 223%。Among them, NIO's R&D expenses in the fourth quarter reached 39$700 million, and selling, general and administrative expenses reached 39700 million yuan, NIO's R&D expenses for one quarter are equivalent to about 2 percent of Leap's R&D expenditures for the whole year of 20228 times.
Compared with Xiaopeng and Ideal, NIO has a grander and long-term brand vision, with huge investment in battery swap stations, self-developed teams in autonomous driving chips and power batteries, and even developed NIO mobile phones. Qin Lihong, co-founder of NIO, said that the cost of a battery swap station for NIO is about 3 million yuan. Last year, NIO built 1,035 new battery swap stations, and the construction cost of these battery swap stations alone was as high as 3.1 billion yuan, not including follow-up maintenance and operation expenses.
Li Bin said that the R&D investment in 2024 will be the same as last year, and about 3 billion yuan will be invested every quarter. In this way, the R&D investment in a year will be maintained at about 12 billion yuan, which is also a large amount.
However, NIO's investment in battery swap stations may decline this year. At the end of last year, NIO opened up its battery swap business to a number of car companies and power units, and the addition of more partners helped promote the construction of battery swap stations, while also reducing NIO's construction costs, which were borne only by NIO itself in the past. This year, NIO aims to build 100 new battery swap stations, most of which are shared battery swap stations for the above-mentioned cooperation, which will ease the pressure on NIO's investment in battery swap stations.
It is worth mentioning that in addition to sharing battery swap stations, the improvement of sales capacity is also one of the best that NIO is full of confidence in 2024. In fact, since the second half of last year, Weilai has started a "crowd tactic" in many stores, recruited a large number of sales personnel, and doubled the sales staff in some stores, which is why the sales expenses in the financial report are so high, even more than 3 billion yuan higher than the ideal of annual sales of 370,000 yuan.
The increase in the number of sales personnel and the improvement of sales efficiency have brought about an improvement in NIO's terminal sales trend. January to February this year was a sluggish period for car purchases, and the monthly sales of most new forces fell sharply month-on-month, while NIO had a better sales trend compared to other car companies.
However, for the current NIO, it is still difficult to achieve Li Bin's target of 20,000 units per month, and internal inefficiency is a problem that needs to be improved urgently. "In 2024, we must resolutely avoid ineffective and inefficient investment, and resolutely save every penny that does not create value for users and the company. Li Bin said in an internal letter.
The carriage that could not be stopped
In NIO's earnings report, there is actually a bigger crisis hidden. According to the financial report, although Weilai has 57.3 billion yuan of cash equivalents reserves, it seems that it can maintain the normal operation of Weilai for a while, but its total liabilities are as high as nearly 90 billion yuan, of which the first amount payable and notes payable reach 297700 million yuan, the spot part of short-term loans and long-term loans has nearly 10 billion yuan, that is to say, NIO owes nearly 40 billion yuan to the first business and bank parts, so at this point, the cash reserves of more than 50 billion yuan are actually not much.
Zhang Si said to the new car technology, Weilai is like a carriage that can't be stopped, as soon as it stops, things will be very serious, there are too many accounts payable, and the first business will become the operating creditor of Weilai, and Weilai has continuous sales, so it can continue to default on this account, but if the monthly sales continue to fall below 10,000 units, it will be very dangerous.
According to NIO's product planning, there will be no new models launched this year, only existing models will be remodeled, and the facelifted models will be equipped with Snapdragon 8295 chips as standard, which will be delivered in early March. Li Bin said that this year, he will focus on software upgrades, and will fully push urban NOA and NOMI GPT to NT2 users in the second quarter.
In the 2024 auto market with involution competition, only model remodeling and software upgrades are estimated to have little effect on NIO's sales promotion, and the real key card for NIO is the second brand Alps.
Alps will officially launch the brand in the second quarter, launch the first product in the third quarter, and deliver it in large quantities in the fourth quarter. Li Bin said that Alps will adopt an independent sales network and a partial NIO after-sales system, and the store layout will learn from Tesla's efficient model, and can use a shared battery swap network and some NIO exclusive battery swap networks.
It is reported that Weilai's second brand Alps is oriented to the family market, and the first product is a direct competitor to Model Y, which will cost 10% lower than Tesla, so it is estimated that the Alps product will jump out of Weilai's existing product system, and the first product may be about 200,000 yuan.
If Alps achieves a hit, it will also bring cost reduction to NIO, because Alps is not a product from 0 to 1, and it can be built on the basis of the technological research and development results accumulated by NIO, which means that it can also be used with parts of other NIO products, and the high generalization rate can reduce the cost of car companies in the process of expanding sales scale. For example, the three products of the Ideal L series have a common parts rate of 68%, and Tesla's Model 3 and Model Y have reached 70%.
In the face of more fierce competition under 200,000 yuan, and at the same time it is delivered at the end of the year, whether Alps can fight a way out is very critical to NIO, and this card will also determine whether NIO's carriage can continue to move forward.
Although NIO has been in a state of loss, with its strong financing ability and relatively large cash reserves, it is not a problem to survive in the short term, but if it wants to develop in the long term, it needs to improve efficiency and sales, and cultivate a strong enough self-hematopoietic ability, otherwise those grand visions will not have time to be realized.