HIGHER expenses, including for research and development, weighed on the latest performance of Chinese electric carmaker Nio : NIO -2.14%, with the company widening its net loss for Q2 ended June to 2.7 billion yuan (S$545 million), from 659.3 million yuan the year before.

 

Revenue for the quarter rose 21.8 per cent to 10.3 billion yuan, with vehicle sales up 21 per cent to 9.6 billion yuan. This came as vehicle deliveries rose 14.4 per cent to 25,059, of which 9,914 were of the ES6 model. 

 

The increase in vehicle deliveries came despite pandemic-related challenges, said William Bin Li, Nio&rsquo s founder, chairman and CEO, in the company&rsquo s earnings statement on Wednesday (Sept 7). 

 

However, Nio&rsquo s gross profit fell 14.8 per cent to 1.3 billion yuan, weighed by a rise in cost of sales. Its bottomline was further weighed by heavier R& D costs, which rose 143.2 per cent to 2.1 billion yuan, as well as higher selling, general and administrative expenses. 

 

Nevertheless, for H1, the company narrowed its net loss to 4.6 billion yuan, from 5.5 billion yuan the year prior. This came on the back of a 23 per cent rise in revenue to 20.2 billion yuan. 

 

Looking ahead, H2 &ldquo is a critical period for Nio to scale up the production and delivery of multiple new products&rdquo , said Li. 

 

&ldquo The ES7, our first mid-large five-seater smart electric SUV based on Nio Technology 2.0, has become a new favourite of the market&hellip We witnessed a robust order inflow for the ES7 and started its deliveries at scale in August. 

 

&ldquo We also look forward to starting the mass production and delivery of the ET5 in late September,&rdquo he said, adding that Nio looks to attract a broader user base. 

Instead of spending  US$7.5 billion of taxpayers' money strictly on creation of brand new electric vehicle charging infrastructure  like the US government is gearing up to do, Beijing has decided to also retrofit the existing legacy vehicle gas station network with EV charging stalls and battery swap stations. The goal, as per the  Beijing Municipal Commission of Urban Management' s 2025 power development plan, is to have no electric vehicle left behind without a charging station in less than a 2-mile radius.

In order to achieve that lofty goal, Sinopec gas stations will be gradually converted to charging stations as well, and will offer battery swaps for those electric car companies like NIO which offer such a service. In the span of three years, Beijing' s EV charging stalls would have to grow sevenfold from the current 100,000 and change. In addition, 310 battery swap stations would need to appear in order to fulfil the plan, so retrofitting existing gas stations instead of just building out brand new places seems like the wise move.

Sinopec, China' s giant petroleum refining conglomerate which has the second largest gas station network in the world, is already billing itself as an " integrated energy service provider" and plans to roll out 5,000 electric vehicle stations for charging or battery swaps by 2025.

Last week, it opened a heavy truck battery swap place that can serve up to 168 semis per day as it can replace a depleted battery with a freshly charged one for 3 minutes automatically. Beijing plans to use its expanded EV battery charging and swap stations network as an energy storage mechanism, too, with a goal to reduce the load on its electrical grid by up to 5%.