NIO again achieved positive operating cash flow in the third quarter and is confident that it can turn cash flow from operating activities positive for the full year 2020 overall, the EV maker's founder William Li Bin said during the third quarter 2020 quarterly conference call.
In terms of capacity, he said NIO had reached 5,000 units in September and expects to increase that number to 7,500 units per month in January next year to meet growing customer demand.
NIO today reported 12,206 vehicles delivered in the third quarter of 2020 with total revenue of $4.526 billion, up 146.4 percent year-on-year and 21.7 percent from the previous quarter, according to NIO's third quarter 2020 financial results.
Third-quarter deliveries of NIO's flagship ES8 were 3,530 units, or 28.9 percent, and 8,660 units, or 70.9 percent, of the ES6.
NIO Q3 revenue up 146.4% year-on-year to $666.6 million, beating estimates
NIO's new ES8 began delivering to the market in April of this year and has continued to make up a higher percentage of deliveries among NIO models since then.
According to data disclosed by NIO at the end of September, the percentage of NIO Pilot Select and Full Package combinations is 50%.
The increase in the proportion of higher priced models sold and the growth in customer options such as the NIO Pilot has led to a continued rise in NIO unit revenues and has also positively impacted vehicle revenues and gross margins.
The following is a transcript of remarks made by William Li Bin, founder of NIO, at 8:00 a.m. during the opening of the third quarter 2020 quarterly conference call.
Hello everyone, and thank you very much for joining us on NIO's Q3 2020 Quarterly Report Conference Call.
ES6 has been the top seller in China's electric SUV market for 13 consecutive months, ES8 is the top seller in China's premium electric SUV market above RMB 400,000, and EC6 has successfully started mass production and delivery.
In September, NIO was ranked No. 1 again in the JD Power 2020 China New Energy Vehicle Experience Study for the quality of pure electric new vehicles.
With the launch of BaaS, our products and services have been recognized by more customers, and new orders in October set another record. In the fourth quarter, we are confident of reaching 16,500 to 17,000 deliveries.
In terms of gross margin, with steady quarterly delivery growth and an increased share of higher-priced vehicles sold, coupled with continued reductions in material sourcing and manufacturing costs, our vehicle and combined gross margins for the third quarter were 14.5 percent and 12.9 percent, respectively, exceeding our previous estimates.
The strength of our company's systems is becoming apparent, and our operating loss narrowed further to $946 million in the third quarter of 2020, down 18.4% from the previous quarter and down 60.7% year-over-year.
In the third quarter, we again achieved positive operating cash flow. We are confident that we can turn positive cash flow from operating activities overall for the full year 2020.
NIO is working on its fifth new car, with its fourth model to be unveiled in Jan
Next, I'll share with you some of our recent highlights.
On the research and development front, we further increased the competitiveness of our NIO NIO Pilot automated driving assistance system by pushing Navigate on Pilot, NoP, to our customers in October, which was well received by our customers and the media.
Through deep integration of multi-sensor environment awareness and high-precision map data, NoP can follow the path planned by navigation to automatically enter and exit ramps and automatically overtake slow vehicles, supporting highways and elevated urban sections, and optimized for Chinese road conditions.
We are accelerating the development of our second-generation technology platform, NT2.0, which is centered on an industry-leading mass-produced automated driving system, and we will share more details at NIO DAY.
On November 6, NIO released the 100 Degrees battery pack.
The 100-degree battery system features a highly integrated CTP design with a 37% increase in energy density, greatly improving the range of the entire NIO product line.
The 100-degree battery pack features a safe design with no heat spreading, 24/7 temperature control, BMS, and other advanced technologies, and will be delivered to customers beginning in December.
With the introduction of the 100-degree battery pack, we will be offering permanent upgrades as well as flexible monthly and yearly upgrades for our 70-degree pack customers. So far, we have successfully closed the loop on the business and service model of body-to-battery separation, battery rental, rechargeable and battery swap, and upgradable.
In terms of capacity, we have reached our full supply chain capacity of 5,000 units in September. The team is working with partners to further increase capacity and expects to increase full supply chain capacity to 7,500 units per month in January next year to meet growing customer demand.
In terms of sales and service network, NIO already has 22 NIO centers and 159 NIO spaces, covering 106 cities in China.
NIO battery swap stations have been built in 159 locations, covering 70 cities. We are developing a lower cost, better experience second generation battery swap station that will be deployed in the first half of next year.
Our user base is growing and the NIO user community is full of more energy. We just celebrated our two-year anniversary as NIO owner-volunteers.
As of November 10, 2020, the NIO community has 3,101 owner-volunteers from 118 cities across the country in showrooms, car shows, live platforms, delivery centers, and NIO DAYs, and the trust and support of our users has been our biggest motivation.
NIO will be celebrating its sixth birthday on November 25, 2020, and with the support of our users and the hard work of our team, we have achieved milestones.
However, we are still a startup with a very short history, facing fierce competition and challenges in the market, we are determined to invest in product and core technology development to provide the best service and full user experience to reward our loyal user community.
