Mar 20, 2020 (China Knowledge) - Last month Nio's headquarters has finalized to settle in Hefei, Anhui Province, confirmed officially on March 18. Along this comes with good news that a total of 8,224 new cars were delivered in Q4 2019, at a growth rate of 71.4% from Q3.
Sales has been growing continuously where Q4 2019 reached RMB 2.68 bln. The whole of last year's total revenue rose 58% to RMB 7.82 bln. This has closed the gap of the losses, resulting a drop of 18.2% year on year, registering RMB 2.86 bln loss.
"Improving gross margin is one of Nio's core goals for 2020. Optimization of supply chain, reducing costs of battery pack, lower manufacturing overhead due to larger production scale and improved management, all give us confidence to achieve our goal of turning positive gross margin in Q2 this year, and reaching double digit by the end of this year" said Li Bin, founder and CEO of Nio, during a teleconference on earnings call.
In the case of steady growth in sales, Nio's sales and management expenses fell 20.5% in 2019 year on year, indicating its improved management efficiency.
Nio has set very strict targets on cost control and management efficiency in 2020 that is quantifiable on a daily basis. Loss in Q1 of this year is expected to be 35% lower than 2019 Q4. In addition, the company will further reduce the cost of battery packs and car components. It is likely to achieve a 20% cut in battery's cost per watt-hour this year, and 10% lower costs on the parts from suppliers.
In addition, Nio is also working on the building users’ service platform to improve customers’ satisfaction which has won the company’s buyers’ word-of-mouth recommendation at a high 69% to choose Nio’s EVs. The service platform not only serve well existing customers but interact intricately with feedbacks on its EVs. Such customer-centric and relentless effort to win customers’ satisfaction may potentially translate into larger sales figures, and turn profitable in 2020.
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