Nio is “very confident” of meeting its target of doubling profits to 250,000 electric powered autos this 12 months, Chief Economic Officer Steven Feng stated, prompting the Chinese automaker’s shares to surge in Hong Kong.
“We are very assured to accomplish our profits target in 2023,” Feng reported in an interview with Bloomberg Tv on Wednesday.
That will be achieved with new designs, increasing the company’s charging and battery-swapping network, and unlocking autonomous driving technologies, he reported.
Assembly the quarter-million income purpose will be a milestone for Nio, which delivered 122,486 autos in 2022. Even though that was up 34 % from a yr before, it skipped the company’s original focus on since product sales were hampered by China’s now-abolished COVID constraints.
Even so, it now faces intensifying competitiveness in China, exactly where a price tag war has broken out as domestic EV makers these as BYD and significant global automakers request to bolster revenue.
The price cuts clearly show the country has far too quite a few automakers, Feng stated. The discounting was sparked by Tesla, which to start with reduced charges in October, and then minimize much more deeply in January. Chinese automakers these types of as Nio and Xpeng adopted suit, as very well as important worldwide brand names like VW and Ford.
“We hope the market to go as a result of some profound consolidation,” Feng stated. “It’s just about consensus that China now has way too quite a few automakers, but we have no approach to obtain any person.”
The China Association of Vehicle Brands on Wednesday urged automakers and local governments to conclusion the selling price war, declaring it’s not a prolonged-term answer, and the automobile market place really should return to typical get as shortly as doable.
Nio earlier this month posted a wider-than-believed 5.8 billion yuan ($843 million) fourth-quarter loss as advertising and marketing and marketing expenditures climbed.
The automaker also documented an annual net reduction of 14.4 billion yuan on earnings of 49.3 billion yuan. Gross margins in the fourth quarter dropped to 3.9 per cent from 13.3 percent the a few months prior owing to a production platform switch and COVID disruptions.
Feng stated the business is “confident” about breaking even at the group degree upcoming year. “Strong profits development collectively with tightened paying out are the key to enhanced profitability,” he stated.
In spite of this week’s gains, Nio’s shares in Hong Kong and the U.S. have plunged additional than 50 per cent in the past 12 months.
Worth nearly double Ford when its sector worth peaked at pretty much $100 billion in early 2021, Nio is now valued at significantly less than a 3rd of the U.S. automaker.