BEIJING, August 31 (TMTPost)— Nio Inc. forcasted its eagerly-awaited smartphone would come soon as the Chinese electric vehicle (EV) manufacturer gave upbeat guidance in the current quarter.

Credit：Visual China

Nio plans to introduce its first mobile phone in late September, the Chairman and Chief Executive Officer (CEO) Li Bin, or William Li, said at an earnings call. Li explained that Nio develops the phone mainly for new users, especially owners of vehicles built on its NT2.0 platform, the second generation of the in-house electric driving system, so the phone itself is developed essentially on the vehicles, but with better mobility and connectivity experience. Nio believes the phone can help the company improve the competitiveness of its vehicles because the phone business is not to compete with phone makers, but to act as a carrier to provide the best experience for vehicle owners, Li said.

Nio is set to launch updated EC6 in September. The EV maker has released five new models on the NT2.0 platform and a facelift in the past couple of months, and EC6 is the last of eight NT2.0-backed models that are scheduled for sale. While Nio doesn’t plan to launch any new model in the year 2024, Li Bin said his company will still roll out some routine phased leaps or product upgrades. Nio believes it is more important to stay focused on existing products to continuously improve their qualities and market performance.  

Moreover, the sub-brand Alps is planned to unveil its firs model in the second half of next year, and that will be highly competitive in its product segment, Li disclosed. As a brand for mass market, Alps has different research and development (R&D) philosophy from Nio, as the automaker will not have many products in the lineup for Alps, and Nio models target the premium segment, where the company cares more about the personalization and also the differentiations of the products, Li said.

Earlier this week, Nio released worse-than-expected financial results in the quarter ended June 30. Total revenue that quarter fell 14.8% year-over-year (YoY) to RMB8.77 billion (US$1.21 billion) that quarter, missing the analysts’ estimated RMB9.25 billion. Excluding share-based compensation expenses, and accretion on redeemable non-controlling interests to redemption value, the non-GAAP adjusted net loss per share was RMB3.28, compared with the expected RMB2.45. The net loss per share in the June quarter more than doubled the loss in the same period a year ago. Under GAAP measure, net loss that quarter widened 123% YoY to RMB6.12 billion, 27.4% more than the first quarter. 

Decline in revenue came as vehicle delivery materially slowed down.  Nio delivered 23,520 EVs the second quarter, decreasing 6.2% YoY and 24.2% quarter-over-quarter (QoQ). Vehicle sales that quarter slumped 24.9% YoY to RMB7.19 billion, down 22.1% QoQ. Besides the decrease in delivery volume, Nio said the sales drop was also due to lower average selling price as a result of higher proportion of ET5 and 75 kWh standard-range battery pack deliveries. Gross margin in the June quarter plunged 12 percentage points YoY to 1.0%, and vehicle margin was 6.2%, compared 16.7% a year earlier. Decrease in the margin was mainly attributed to changes in product mix, partially offset by the decreased battery cost per unit.

However, Nio predicted a turnaround in the third quarter. It expected delivery to be between 55,000 and 57,000 vehicles, representing an increase of about 74% to 80.3% YoY. Total revenue this quarter was expected to grow 45.3% to 50.1% YoY to a range of RMB18.9 billion and RMB19.52 billion. Both the delivery and the revenue are set to hit quarterly record.

Nio just shattered monthly record in July. The EV maker shipped 20,462 vehicles in July, surging 103.6% YoY. Li Bin noted delivery volume in July propelled NIO to the top position in China's premium EV market for vehicles priced above RMB300,000. Li Bin said Nio aims to deliver monthly sales of 30,000 vehicles, and through its effort of building sales team, the company will have that initial capability of sales ready by the end of September, then the real effect will kick in from October.