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NIO’s ET5 has been one of the hottest cars in the market. However, deliveries only reached 1,609 vs the expected 10k in October due to supply chain bottlenecks. At NIO’s 3Q conf call, the company said it had lost RMB4.1b, or the equivalent of RMB131k per car, but chairman Li Bin believes that NIO can break even by 4Q23 with gross margins rebounding to 20-25%. Jefferies believes that this is unlikely as Lithium prices will likely stay higher than Nio’s forecast. According to the company, every RMB100kt change in the lithium price results in a 2ppt change in GPM. Also, R&D prices are likely to stay high as Nio continues to invest in vertical integration.
By Michael Elkins | Michael.Elkins@streetinsider.com
