By Jiahui Huang
NIO's first-quarter net loss deepened despite stronger revenue, dragged by higher operating expenses amid intensifying competition in the world's largest electric-vehicle market.
The Chinese automaker said Tuesday that its net loss was 6.89 billion yuan, equivalent to $957 million, widening from 5.26 billion yuan a year earlier. Revenue rose 21% to 12.03 billion yuan.
Analysts had expected a 5.64 billion yuan loss on revenue of 12.20 billion yuan, according to a Visible Alpha poll.
NIO's gross margin rose to 7.6% in the first quarter from 4.9% a year earlier but was lower than 11.7% recorded in the fourth quarter.
The weaker-than-expected results bring into sharp relief the fierce competition in China's EV market that is only expected to continue after industry leader BYD offered steep discounts on a range of models recently, prompting some rivals to follow suit. NIO has yet to post a profitable quarter, though it has made some progress on sales volume and is working to reduce costs.
"Starting from the second quarter, the company aims to achieve structural improvements in overall cost efficiency, with continued progress in operational performance," said Stanley Yu Qu, the company's chief financial officer.
In the current quarter, the EV maker projected deliveries to jump to 72,000-75,000 units and revenue to rise 12%-15% to between 19.51 billion yuan and 20.07 billion yuan.
Deutsche Bank analyst Bin Wang expects 22% sequential rise in NIO's vehicle deliveries this month despite a sales miss in May. That could push sales to a new quarterly record of 75,500 units, he said in a research note.
The Shanghai-based company is considered one of the top three emerging EV brands in China, alongside XPeng and Li Auto. However, its relatively low vehicle sales have weighed on the stock, which has significantly underperformed its peers. NIO's Hong Kong-listed shares have fallen 21% year to date, compared with the 65% gain for XPeng and the 24% rise for Li Auto.
There are signs that the automaker, which has positioned itself as a premium brand, is adapting to macroeconomic shifts and consumer downtrading. NIO in April said it was "rapidly moving into a new product cycle" in 2025, with plans to release nine models across its three brands. The company's new ONVO and Firefly subbrands both target the mass market.
The company has also tried to distinguish itself by focusing on advancing battery technology. It relies on battery-swapping stations rather than battery-charging ones for better efficiency, but the former requires higher setup costs.
NIO's American depositary receipts were recently 2.8% lower in premarket trading.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
06-03-25 0841ET
