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NIO (NYSE:NIO), one of the largest EV manufacturers in China, has seen its stock price soar dramatically over the recent months amid general euphoria that has gripped the entire EV space. As an illustration, NIO shares have registered gains of over 215 percent since the 1st of June. Today, the company has come under a fresh spotlight as it reports its earnings for the second quarter of 2020.

NIO Q2 2020 Earnings Scorecard

For the three months that ended on the 30th of June 2020, NIO earned a revenue of $526.4 million.

Revenue Comparison

Revenue

0

100

200

300

400

500

600

0

100

200

300

400

500

600

Q2 2019 219

Q1 2020 193

Consensus 501

Q2 2020 526

(All figures are in millions of dollars)

Crucially, NIO delivered 10,331 EVs in the entire Q2, corresponding to an annual increase of 190.8 percent.

EV Deliveries

Q2 2019 Deliveries

Q2 2020 Deliveries

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4000

8000

12000

16000

20000

24000

0

4000

8000

12000

16000

20000

24000

ES6 3.1k

8.1k

ES8 413

2.3k

Total 3.6k

10.3k

(All figures represent unit deliveries)

NIO reported $1.6 billion in cash and cash equivalents for the quarter.

Cash Comparison

Cash

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400

800

1200

1600

2000

2400

0

400

800

1200

1600

2000

2400

Q2 2019 503

Q1 2020 338

Q2 2020 1.6k

(All figures are in millions of dollars)

Finally, the EV manufacturer reported -$0.16 in EPS, beating consensus expectations by $0.1.

EPS Comparison

EPS

-0

-0

-0

-0

-0

-0

-0

-0

Q2 2019 0

Q1 2020 0

Consensus 0

Q2 2020 0

(All figures are in dollars)

NIO also provided the following business updates:

NIO launched the EC6 on July 24, 2020 at the Chengdu Motor Show. The 5-seater premium smart electric coupe SUV starts at a pre-subsidy price of RMB 368000,and is now available to order via the NIO app with delivery to start in September 2020.

On June 29, 2020, the Company announced that the strategic investors have substantially completed the cash injection obligations for the first two installments of their investments in NIO China. As of today, NIO (Anhui) Holding Co., Ltd., or NIO Anhui, the legal entity of NIO China wholly owned by the Company prior to the investments, has received from the investors the RMB5 billion cash investments for the first two installments in full.

In June 2020, NIO completed the offering of 72,000,000 American depositary shares, each representing one Class A ordinary share of the Company, at a price of US$5.95 per ADS, and an additional overallotment of 10,800,000 American depositary shares.

NIO plans to use the net proceeds from the ADS Offering mainly to fund its cash investments in NIO China, as well as other working capital needs. The Company expects NIO China to use the cash investments for research and development of products, services and technology, development of our manufacturing facilities and roll-out of our supply chain, operation and development of our sales and service network and general business support purpose.

Investors have reacted positively to the company’s Q2 2020 earnings. As an illustration, the stock is currently up 5.89 percent in the pre-market trading:

Source

Of course, NIO continues to maintain its momentum in Q3 2020 as well. As per the disclosure by the company on the 3rd of August, it delivered 3,533 EVs in July, consisting of 2,610 ES6s and 923 ES8s. This delivery number marks an increase of 322.1 percent relative to the comparable month last year.

Today’s earnings announcement comes on the heels of several major developments that have taken place recently. For instance, we reported on the 23rd of July that NIO is planning to establish a separate battery asset management company that will allow for the launch of a dedicated Battery as a Service (BaaS) facility. This idea has been in the planning stage for around 6 months now. The battery asset management company will be led by NIO Energy and will incorporate investments from a number of entities, including Contemporary Amperex Technology (CATL) (SHE:300750), China's largest automotive lithium-ion battery maker. Once NIO implements the BaaS model, a user will have the facility of renting a battery from the battery asset management company, thereby, drastically reducing the cost of owning an electric vehicle.

Readers should remember that NIO is steadily gaining strength in China. According to the Chinese National Passenger Car Information Exchange Association (CPCA), the top ten domestic EV manufacturers accounted for 14.1 percent of the total EV sales in China during H1 2020. NIO accounted for 31 percent of the sales volume generated by the top ten manufacturers, having sold 14,169 units during the period.