⚡ Nio under pressure 😰

Happy Monday. This is Electric Avenue. For this early summer edition we’re keeping it refreshing and light, with a little Spritz of fun. Think of us as the Aperol Spritz of EV newsletters. It’s Aperitivo time! 🍹

Here’s what we have for you today:

• Nio under pressure 😰

• 3 Links 🔗

• Memes of the week 🤡

Let's get into it!

Nio under pressure 😰

Nio just released their unaudited financial results for the first quarter of 2023 and boy, are they disappointing! We save you some time and summarised the key insights.

• Deliveries: NIO delivered 31,041 vehicles in Q1 2023, which is a 20.5% increase from Q1 2022, but a 22.5% decrease from Q4 2022. That's a huge drop in sales!

• Sales: Their total revenues were RMB10,676.5 million (US$1,554.6 million), which is a 7.7% increase from Q1 2022, but a 33.5% decrease from Q4 2022.

  • 🚗 vehicle sales were RMB 9,224.5 million (US $1,343.2 million)

  • 🔋Charging incl. battery swapping, accessory sales, and services summed-up to RMB1,452.0 million (US$211.4 million), accounting for 13.6% of its total revenues.

• Vehicle Margin: Their vehicle margin was only 5.1%, compared to 18.1% in Q1 2022 and 6.8% in Q4 2022. That's a very low margin for a premium brand!

• Company Profit / Loss: The total company’s net loss was RMB4,739.5 million (US$690.1 million) in the first quarter of 2023, a 165.9% increase from the first quarter of 2022 and an 18.1% decrease from the fourth quarter of 2022.

• Price Cut: To make matters worse, NIO also announced price cuts for some of its models to compete with Tesla's Model Y and Model S, which have been gaining popularity in China and other markets. NIO slashed the prices of its ES8 SUV by RMB70,000 (US$10,200) and its ET7 sedan by RMB50,000 (US$7,300).

Three Thoughts 💭

1. Nio’s financial results for the first quarter of 2023 were disappointing, as the company missed revenue expectations, saw its gross margin decline sharply, and reported a wider net loss than a year ago. 😰

2. Nio’s decision to slash prices across all its models was a surprising move, as the company had previously said it would not join the price war in the Chinese EV market. The price cut could help Nio boost its sales volume and market share, but it could also hurt its profitability and brand image as a premium EV maker. 😬

3. Nio’s price cut could put more pressure on Tesla, which has already lowered its prices on some of its models in China to compete with domestic rivals. Tesla has a strong brand recognition and loyal customer base in China, but it also faces regulatory and trade uncertainties in the world’s largest EV market. Tesla may have to balance between maintaining its margins and defending its market position. 🍿

So what do you think of NIO's performance and strategy? Do you think they can survive the fierce competition from Tesla and other EV makers? Let us know your thoughts in the comments of the post! 😊

3 Links 🔗

• Rivian confirms bidirectional DC charging readiness🔋: In a video Q&A Rivian Founder & CEO RJ Scaringe is speaking about bidirectional charging and V2H. Notably, he points out that "All vehicles on the road today are bidirectional capable" and that Rivian is working on a DC-V2X charger following the approach of Ford’s intelligent backup power.

• AI-Tool for charging station health 🏥: Evercharge is a predictive maintenance tool presented by E.On which lets CPOs proactively monitor their network’s health status. After being validated at chargepoint operator E.ON internally, Evercharge is available and can be implemented based on any charge point management system’s OCPP communication.

• Hands-off 👐, Eyes-off 👀 driving with Mercedes-Benz: The company received a permit from California regulators to sell or lease vehicles with a conditional automated driving system called Drive Pilot. The system allows for hands-free, eyes-off driving on certain highways and under certain conditions. Mercedes-Benz is the first company to get this approval and plans to offer Drive Pilot as an option for some of its models in 2024.

Memes of the Week 🤡

That's a wrap for this week! Let us know how you feel:

Reader Review of the Week

Selected ⚡️⚡️⚡️ Pretty decent on⚡ €195M+ for EV startups, Tesla opens Canadian network and wrote:

"dcbel info is very helpful"

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DISCLAIMER: None of this is financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. The Electric Avenue team may hold investments in or may otherwise be affiliated with the companies discussed.