Chinese EV Maker Nio's Challenges Bleed Into Its Bond Prices
A rally in the price of Nio Inc. 's convertible bonds isn't enough to allay concerns over the Chinese electric vehicle maker's financial health, analysts say.
Nio's 3.875% US dollar notes due 2029 have risen this week, buoyed by positive sentiment surrounding the sector as auto executives from around the world gather in Shanghai for the nation's premier car show. But only earlier this month they were at 67.65 cents on the dollar — a level widely considered distressed and the lowest in seven months.
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Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. NIO Inc (NYSE:NIO) delivered 42,094 smart EVs in Q1 2025, marking a 4.1% year-over-year increase. The company launched and delivered new models including the ES6, EC6, ET5, and ET5T, which are expected to drive significant growth in Q2. NIO Inc (NYSE:NIO) achieved year-over-year growth in both vehicle gross margin and overall gross margin due to cost reduction efforts. The NIO brand's ET9 surpassed BMW 7 Series and Audi A8 in China, marking a breakthrough for a Chinese brand in the premium executive segment. NIO Inc (NYSE:NIO) raised over HKD4 billion in a share offering in Hong Kong, attracting global long-term investors. Total revenues decreased 38.9% quarter-over-quarter, reflecting a seasonal impact on deliveries. Vehicle margin decreased to 10.2% from 13.1% in the previous quarter due to increased manufacturing costs per unit. 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The NWM provides better point-to-point smart driving and parking experiences, with features like automatic toll gate pass-through. The NWM-based version will be released on the NX1931 chip in late June, and ONVO products will also switch to in-house developed smart driving chips in the long term. Q: How does NIO plan to enhance the volume sales of the ONVO L60, and what are the expectations for the L80 and L90 models? A: Bin Li, CEO, explained that organizational and operational adjustments have been made to improve ONVO's sales, with L60 deliveries increasing by over 40% in May compared to April. The L60 has been a top-selling product in its segment, and the L90 will be launched in Q3, expected to be a game-changer in the large space SUV segment. By Q4, NIO aims for a monthly delivery of 25,000 units across the three ONVO models. Q: Can NIO achieve a breakeven in Q4, and what are the assumptions for this target? A: Bin Li, CEO, confirmed that NIO's internal operational target aligns with the assumptions mentioned: achieving over 50,000 monthly sales, a vehicle gross margin of 17-18%, and SG&A expenses within 10% of sales revenue. With improved sales volume, cost reductions, and efficiency improvements, NIO is confident in achieving breakeven in Q4. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
