Nio Inc. (NYSE:NIO) Q1 2019 Earnings Conference Call - Final Transcript
May 28, 2019 • 08:00 am ET
Hello, ladies and gentlemen, thank you for standing by for NIO Incorporated's First Quarter of 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded.
I will now turn the call over to your host, Ms. Jade Wei, Senior Director of Investor Relations of the Company. Please go ahead, Jade.
Thank you, Annie. Good evening and good morning, everyone. Welcome to NIO's first quarter 2019 earnings conference call. The Company's financial and operating results were published in the press release earlier today and are posted on the Company's IR website.
On today's call, we have Mr. William Li, Founder, Chairman of the Board and Chief Executive Officer; Mr. Louis Hsieh, our Chief Financial Officer; and Mr. Nick Wang, our Vice President of Finance. Louis is joining us by telephone from the United States. Before we continue, please be kindly reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's actual results may be materially different from the views expressed today.
Further information regarding risks and uncertainties is included in certain filings of the Company with the US Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.
Please also note that NIO's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to NIO's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.
With that, I will turn the call over to our CFO, Mr. Louis Hsieh. Louis, please go ahead.
Thank you, Jade. Hello, everyone, and thank you for joining our call today. In the first quarter 2019, NIO delivered 3,989 ES8s, our high performance premium electric SUV, exceeding the Company's prior delivery targets between 3,500 to 3,800. This was followed by 1,124 ES8 deliveries in April, bringing total aggregate deliveries to 16,461 vehicles as of August 30, 2019. Compared to the fourth quarter 2018, we experienced softer demand in the first quarter due to accelerated deliveries made at the end of last year in anticipation of electrical vehicles subsidy reductions, as well as seasonal factors surrounding the Chinese New Year holidays. Further, we have seen the slowdown in ES8 orders, which became noticeable after Chinese New Year and has worsened into the current quarter.
We anticipate a sequential decrease in deliveries when second quarter closes, primarily due to one, macroeconomic concerns over the lingering US-China trade war; two, overall continued sluggishness in the Chinese auto market, which saw year-over-year -- year-to-date wholesale vehicle sales drop 15% year-over-year and retail vehicle sales drop 12% year-over-year; three, larger than anticipated electric vehicle subsidies cuts, which lowered ES8 subsidies by 40% to RMB40,500 from RMB67,500 in 2018. Subsidies will further be reduced to RMB11,520 beginning June 26,