Shares of Nio (NYSE:NIO) are trading lower after the Chinese electric vehicle (EV) company reported its deliveries for the month of November. Nio delivered 15,959 vehicles, up by 12.6% year over year (YOY). Of the deliveries, 10,545 were premium smart electric SUVs, while the remaining 5,414 were premium smart electric sedans. That brings its third quarter deliveries to 55,432 vehicles. Nio had previously guided for third quarter deliveries between 55,000 and 57,000 vehicles.
Nio has now delivered 142,026 vehicles so far this year, marking a 33.1% YOY increase. Its cumulative deliveries since inception total 431,582 vehicles.
So, why exactly is NIO stock trading lower today with 33% growth? Let’s get into the details.
NIO Stock: Nio Releases November Delivery Metrics
First, competitors Li Auto (NASDAQ:LI) and XPeng (NYSE:XPEV) set monthly delivery records with 41,030 and 20,041 vehicles, respectively. Nio wasn’t able to do so, as it delivered 16,047 vehicles in October, slightly more than the figure for November.
Another reason is that Nio is unprofitable. Based on its second quarter loss of $835 million, the automaker lost $35,000 for each vehicle it sold. Government assistance has helped the company stay afloat as it chases profitability.
Meanwhile, shareholders are hoping for a boost in profitability when Nio reports its third quarter earnings on Tuesday, Dec. 5 before the market open. Analysts tracked by Koyfin are expecting $2.66 billion in revenue, which would imply YOY growth of 49.23%. Furthermore, the company is expected to stay unprofitable with a GAAP EPS loss of 23 cents and an adjusted EPS loss of 36 cents. This would mark an improvement from its second quarter GAAP EPS loss of 51 cents and adjusted EPS loss of 45 cents.
In addition, the company’s gross profit is expected to make a comeback. The estimate of $256 million marks a 2,029% increase over the second quarter and a 7.99% increase YOY.
However, the fourth quarter could be rough for Nio, according to Deutsche Bank analyst Edison Yu. Yu expects fourth quarter deliveries in the mid- to high-40,000 range, which would reflect a decline from the third quarter.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
