NIO, Inc. Q4 FY2024 earnings call

Product Deliveries - Q4 delivered 72,689 Smart EVs, Dec surpassed 30,000; 2024 total deliveries 221,970, +38.7% y-o-y. - Q1 expected deliveries 41,000 - 43,000, +36% - 43% y-o-y. ### Product Updates - NIO: Launched NIO 89 in Dec, Q2 to launch 2025 models of ET5, ET5T, ES6, EC6; second major product in H2. - ONVO: L60 gained recognition; L90 to launch in Q2, deliver in Q3; third product in Q4. - Firefly: Debuted in Dec 2024, set to launch and deliver in April. ### Smart Driving - NIO's smart safety prevented over 3.4 million potential accidents; AES improved driving safety; next-gen architecture NVM early board program starts early April. ### Sales and Service Networks - NIO has 183 NIO houses and 462 NIO spaces; ONVO has 449 stores in China; 388 service centers and 64 delivery centers. - Over 3,245 power swap stations globally, including 970 on China highways, over 69 million swaps done.

In Q4, NIO delivered 72,689 Smart EVs, with December deliveries surpassing 30,000 for the first time. For 2024, total deliveries reached 221,970, up 38.7% year-over-year. The NIO brand delivered 201,209 vehicles, securing a 40% market share in China's BEV segment priced above RMB300,000. The ONVO brand delivered 20,761 vehicles, with the ONVO L60 ranking among the top three in China's BEV SUV market price between RMB200,000 and RMB300,000. Financially, NIO’s vehicle margin improved to 14.9% in Q4, ONVO achieved positive vehicle margin in early production run-up, and overall vehicle margin reached 13.1% in Q4. Other sales were RMB2.2 billion, growing 33.8% year-over-year and 12.7% quarter-over-quarter. Total revenues were RMB19.7 billion, up 15.2% year-over-year and 5.5% quarter-over-quarter.

• Q1 expected deliveries: 41,000 - 43,000 units, +36% - 43% y-o-y. - 2025 full-year target: double sales volume from last year. - Cost reduction: Continues from multiple aspects, vehicle margin expected to grow from Q2; aim to achieve breakeven in Q4. - ONVO: Improve brand awareness, expand sales and service network, enhance team maturity, increase swap station coverage to regain growth momentum.

• Competitive landscape in smart EV industry evolves rapidly. - ONVO brand faces challenges like low brand awareness, low efficiency of sales stores, immature sales team, and initial battery swap station supply shortage. - RMB depreciation against USD caused overseas RMB-related assets revaluation loss. - Uncertainty in smart driving technology R&D and market promotion.

Q: About cost reduction effort, how much cost saving expected and when to see contribution in upcoming quarters?

A: Since last year started cost mining initiatives, 2024 on track. Continue from multiple aspects, foresee vehicle margin grow from Q2; started all-employee comprehensive cost reduction initiative, results to reflect in balance sheet from Q2, confident to achieve breakeven in Q4.

Q: About ONVO, what actions to regain growth momentum and will NIO stick to multi-brand strategy?

A: Actions include strengthening brand awareness via offline ads and social media, ramping up sales store coverage, improving sales team maturity; will keep ONVO sales network separate as targeting different user groups, also have pilot programs for sales team to sell other brands.

Q: About gross margin including vehicle gross margin and overall gross margin, and volume guidance for 2025?

A: Q1 vehicle margin under pressure; full-year target to achieve breakeven in Q4. Cost reduction measures like platform-based products, standardized smart hardware interfaces, in-house developed parts. 2025 sales volume target: double from last year, driven by NIO product launch, ONVO brand improvement, and power swap network effect.

Q: Thoughts on AI autonomous driving, robotics?

A: AI applied in NOMI with large language model capabilities, also in smart driving technologies; mainly focus on core business in foreseeable future, AI as enabler for better product experience.

Q: About cash position, supply chain perspective and CapEx guidance?

A: Cash position at end of 2024 was RMB49.1 billion; will be prudent in cash flow management. CapEx this year higher than last year but managed prudently; power swap stations leverage partners' resources.

Q: About autonomous driving technology plan and OpEx guidance?

A: End-to-end model for active safety released, Navigate On Pilot Plus for city roads to release by end of April; R&D expenses around RMB3 billion per quarter non-GAAP; SG&A expenses managed to improve efficiency in coming quarters as sales volume grows.

Q: About other sales gross margin?

A: Mainly from aftersales services, power services, technical services; positive margin in Q4 due to improved aftersales services efficiency, future similar revenues but not recurring regular.

Q: About longer-term outlook on sales volume, gross margin and operating margin?

A: For smart EV company to survive longer term, annual volume of 2 million units with 20% gross margin, 7% - 8% net margin as baseline.