After a number of setbacks in the first half of the year, Nio may be poised for a rebound. The beleaguered electric vehicle (EV) maker said on Tuesday that car deliveries in the third quarter exceeded the top end of its guided range.

Why it matters: Nio’s efforts to boost sales of its second mass-produced model, the ES6, is paying off. The company kicked off a series of major promotions beginning in August after it began delivering the five-seat luxury SUV in late June.

  • Nio introduced in late August an unlimited free battery swap along with its existing lifetime vehicle maintenance policy to first-time buyers of its ES8 and ES6 models, which “attracted a large group of potential users,” said Louis Hsieh, Nio’s chief financial officer during the Q2 earnings call last month.
  • The automaker then extended its auto financing programs, offering a three-year, interest-free loan for domestic buyers, as well as a five-year “zero down payment” promotion in Shanghai, which significantly boosted orders beginning in September, Hsieh said.

Details: Nio on Tuesday said that its Q3 deliveries increased 35.1% sequentially to 4,799 vehicles. It had forecast a delivery range between 4,200 and 4,400 units for the three months ended September 30.

  • Sales of its premium seven-seater SUV, the ES8, sank more than 80% quarter-on-quarter to 603 units, with the ES6 making up the balance.
  • September sales increased slightly month-on-month to 2,019 units, 85% of which were for the ES6.
  • The Tencent-backed EV maker delivered just 1,086 ES6 models in June and July, which the company attributed to prioritizing manufacturing capacity for the battery recall, which affected 4,803 ES8 cars.
  • Aggregate deliveries since the company began large-scale deliveries in June 2018 totaled 23,689 vehicles as of September 30, more than half of which were completed this year.
  • Nio share prices surged 9.7% to $1.70 by market close on Tuesday. However, the company’s market capitalization has fallen 75% to $1.79 billion since it went public last September.
  • It plans to further accelerate deliveries for the rest of the year with the addition of delivering its two models with an 84-kWh battery pack in October, said Li Bin, the company’s founder and CEO.

Bottom line: Whether the sales rebound will improve Nio’s earnings for the remaining two quarters of the year is yet to be seen. The company has booked net losses exceeding RMB 20 billion ($3 billion) since 2016.

  • Nio recorded an increase in margin from -7.2% in the first quarter to -4% in Q2, excluding costs incurred from the battery recall.
  • The company expects gross margin will “certainly” improve as more vehicles are delivered, but will remain negative for the rest of the year.
  • Li expects additional costs from the free battery swap initiative will be “quite low” at around RMB 50,000 per day, mainly due to electricity consumption, he said during the second quarter earnings call.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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