What happened
Shares of Chinese electric-vehicle maker NIO (NYSE: NIO) were trading higher on Monday, after the company reported a strong deliveries total for July and said that deliveries of its next new model will begin in September.
As of 11:45 a.m. EDT, NIO's American depositary shares were up about 10.4% from Friday's closing price.
So what
NIO said on Monday that it delivered a total of 3,533 vehicles in July, its second-highest monthly total ever and 322% higher than its total from July 2019, when it was bogged down in a costly recall.
That sounds like good news, and it was. But skeptical investors might raise an eyebrow at the claim that it was NIO's second-highest monthly delivery total ever. It was, but the first-highest was in June: Month-over-month, deliveries fell 5.5%.
But hang on: NIO's statement suggested that the decline was due to a supply issue, not a demand issue.
NIO said that it had to idle its production line for five days in July in order to set up tooling for its newest model, the coupe-like EC6 crossover. In addition, some of its suppliers are located in areas that had flooding during the month, meaning that supplies of some parts were tight.
NIO expects deliveries of its new EC6 to begin in September. Image source: NIO, Inc.
Those parts shortages may explain NIO's deliveries mix. Deliveries of the smaller ES6 rose 5.4% from June, to 2,610, a nice increase. But deliveries of the larger ES8, which had been selling well recently, fell 27% from June, to 923.
Long story short: Deliveries fell from June because it had fewer vehicles to deliver in July, not because demand has started to slip.
Now what
In a statement, CEO William Bin Li said that NIO did break one record in July — its monthly order growth has never been higher. That, and the company's terrific second-quarter sales result, bodes well for a positive response from auto investors when NIO reports its second-quarter earnings.
That report is scheduled to happen before the market opens on Aug. 11.
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