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Shares of the Chinese electric automaker Nio Inc – ADR (NYSE: NIO) are known for their volatility, and on Tuesday, the company is set to post its second-quarter results before the market opens.
Expectations
Analysts, on average, expect Nio to report a loss of 18 cents per share on revenue of $185 million, down about 24% from the first quarter, when it saw a 52.5% quarter-over-quarter decline in revenues.
The estimated second-quarter loss, would be narrower than the first-quarter loss of 36 cents per share.
Nio guided to second-quarter vehicle deliveries of 2,800-3,200, a 19.8%-29.8% decline from the first quarter, and revenue of $169 million to $193 million, a 20.7% to 30.5% sequential drop.
See Also: Nio Reports Q2 Deliveries Above Guidance
Falling Deliveries, Revenue
After more than doubling to $496.83 million in the fourth quarter of 2019, Nio's revenue fell by half in the first quarter of 2019 as vehicle deliveries slumped due to a host of factors.
Nio, which is often referred to as China's Tesla Inc (NASDAQ: TSLA), sells two vehicle models: the ES8, a seven-seater midsized SUV launched in June 2018, and the ES6, a five-seater midsized SUV rolled out in June 2019.
Nio had a modest start in the second quarter of 2018, when the automaker sold 100 ES8s, with just three days of sales in the quarter following its June 28, 2018 launch.
Deliveries jumped to 3,268 in the third quarter of 2018.
ES8 deliveries more than doubled to 7,980 in the fourth quarter of 2019.
The first quarter of 2019 saw a roughly 50% decline in deliveries to 3,989 ES8 vehicles, with the company attributing the predicament to reductions in electric vehicle subsidies, slowing macroeconomic conditions, increased competition and seasonal factors around the Chinese New Year holiday period.
Things didn't get better, with Nio reporting 1,124 vehicle deliveries in April, citing the EV subsidy reduction and the macroeconomic weakness that was exacerbated by the escalation of trade tensions between the U.S. and China. Deliveries dipped further to 1,089 in May, although there was a modicum of improvement in June, when it sold 1,340 vehicles.
The June deliveries included 413 ES6 model vehicles launched on June 18. Second-quarter deliveries totaled 3,553, a roughly 10% decline from the first quarter.
In July, the company reported 837 deliveries, including 673 ES6s and 164 ES8s, with a battery recall along with the other usual factors blamed for the weakness.
Reports suggest that deliveries may have improved notably to 2,976 in August, with the higher number attributable mostly to the newly launched ES6 model.