China’s Tesla Set To Report Mounting Losses, But Look For This| Investor’s Business Daily

Nio (NIO) reports earnings for the fourth quarter early Wednesday, and losses are expected to mount after the Chinese premium EV startup missed its Q4 delivery target. Nio stock edged higher Tuesday, but down sharply in recent weeks.

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More than Nio earnings, outlook will be key. Investors are looking for a recovery in EV deliveries following the seasonally weak current quarter, as production headwinds ease.

After Tesla (TSLA) price cuts in China, some analysts warn that EV demand could weaken for the U.S.-listed Chinese EV startups, especially Nio and XPeng (XPEV). Both have cut EV prices after Tesla’s cuts.

Nio Earnings

Estimates: Analysts polled by FactSet expect Nio to widen losses to 26 cents per ADR share from 17 cents a year ago. Revenue is seen jumping 58%, year over year, to $2.462 billion.

This would mark Nio’s first $2 billion revenue quarter. It first topped $1 billion in Q4 2020.

The startup, sometimes called China’s Tesla, has already disclosed Q4 2022 deliveries of 40,052 electric vehicles. That was well off initial guidance of 43,000-48,000 EVs, due to Covid-fueled supply disruptions and operational issues.

Results: Check back Wednesday before the open.

Outlook: In fiscal 2023, Wall Street expects Nio to lose 66 cents per share vs. an estimated loss of 97 cents in 2022. Revenue is seen bounding 84% next year.

NIO Stock, China EV Stocks

Shares of Nio edged up 0.6% to 9.39 on the stock market today, below a falling 50-day moving average. After a four-week slide into earnings, Nio stock is back near October’s two-year lows.

Premium EV peer Li Auto (LI) advanced 1.3% Tuesday, bouncing from its 50-day line and extending its post-earnings rally on upbeat delivery and revenue guidance Monday. XPEV stock popped 3.8% Tuesday but remains not far above record lows.

Li outsold Nio and XPeng in the final quarter of 2022. Then, in a seasonally soft January, all three Chinese EV startups recorded year-on-year sales declines.

Li, Nio and XPeng will report February deliveries on Wednesday morning, as well. Weekly China EV registration data suggests higher monthly sales for all three startups.

In Q2, analysts hope for a recovery as new models roll out and EV production ramps up.

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