During November, NIO’s vehicle deliveries’ growth momentum was sustained and grew by 40.9% from the 10,059 vehicles delivered in October.
China’s gradual reopening will further accelerate vehicles deliveries in December
China has been making slow but visible progress in relaxing its COVID-19 restrictions.
While a full reopening in China is still months away, the gradual reopening of China and easing of COVID restrictions will further accelerate vehicle production and deliveries in December.
Even before the easing of restrictions, NIO had been taking steps to mitigate the risk of further lockdowns.
Among some of these measures include a build-up of inventories, especially on key raw material components, increases in the frequency of shipments and logistics as well as a closed-loop system at factories, which requires workers to stay on-site.
Vehicles deliveries needs 32.3% growth to meet guidance
NIO’s management has guided for vehicles deliveries to reach between 43,000 to 48,000 units in Q4 FY2022.
This means that NIO needs to achieve vehicles deliveries of 18,763 units in December, an increase of at least 32.3% from vehicles deliveries in November.
This will also put production and deliveries numbers closer to the expected 20k units per month by the first half of 2023.
NIO’s positive updates in November
NIO ET7, which was just launched in its new market, Germany, impressed as NIO won the internationally coveted car award, THE GOLDEN WHEEL, in the category “Medium and Upper Class”.
ET7 was also awarded the maximum five-star rating in the latest safety tests of European New Car Assessment Programme (NCAP) with its innovative body materials application and high-strength structural design.
In addition, the ET7 has also secured a top five-star rating in the latest Green NCAP with high scores on clean air, energy efficiency and greenhouse gases.
Aside from that, NIO also entered into a strategic cooperation with Tencent Holdings Limited (SEHK: 0700), one of China’s largest technology companies, to deepen its partnership in the areas of autonomous driving-related cloud services, intelligent driving maps and digital ecosystems.
NIO App also shows reduced expected delivery time for all the three models based on the NT 2.0 platform.
This indicates that the improved supply chain conditions and NIO’s proactive measures have helped NIO to ramp up its capacity in November.
With the reopening of China on the horizon, along with improved sentiment on China stocks, NIO should see a return of investors’ interest.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.