(Reuters) – Shares of Tesla competitor, Nio Inc. surged 53% on the Monday after the electric-car maker reported a smaller-than-expected loss, profit from the sale of more lower-priced vehicles, as the industry faces weak demand.
FILE PHOTO: a Chinese electric-car start-up, Nio, Inc. the logo can be seen on the initial public offering (IPO) a day on the new york stock exchange in New York, New York, united states of america, September 12, 2018. REUTERS/Brendan McDermid/File Photo
The loss of the electric-car maker, said sales improved in September and that it will be delivered 4,799 number of items in the quarter that ended in Sep. 30, compared with 3,553 for delivery in the second quarter of the year.
This comes at a time when the electric car is that the makers have had to contend with uncertain demand in China, the world’s largest car market, such as the end of subsidies for new energy vehicles, and in the midst of the criticism that some companies are too dependent on these funds.
China’s currency Nio said, funding for the more expensive ES8 model), a seven-seat sport-utility electric vehicle, which is generally considered to be a rival of Tesla, Inc., Model X, is cut by nearly 83% from the month of June.
To add to the misery, Nio, on Monday, warned that he didn’t have enough money to pay for the “continuous operation for a period of 12 months, and was looking for external sources of funding.
The company, which counts Chinese internet giant Tencent Holdings and Hillhouse Capital Management, as well as to the shareholders was increased to $1 billion last year in an initial public offering that valued it at about $6.4 billion.
In May, Nio entered into an agreement with a government-backed fund, made an investment of approximately $1.5 billion. (few.rs/2ldpU8j)
The company said on Monday that the balance of cash and cash equivalents, restricted cash and short-term investments, was for 1.96 billion yuan as of Sept. 30, 2019 at the latest.
A larger competitor of Tesla, said on Monday it has begun the delivery of the Model 3 electric car, from its strategic manufacturing facility in Shanghai, which started operations less than a year ago, and it is planning to invest in the supplies in January.
Nio’s Chief Executive Officer William Bin Li, however, sees little threat from it. “If you compare it to the Model (3) with our products, we believe that our product is still very competitive,” he said.
The company expects to deliver more than 8,000 units in the fourth quarter of the year.
Excluding items, the Nio posted a smaller-than-expected loss of 2.38 yuan per share, in the third quarter, compared with the average analyst estimate of a loss of 2.43 yuan. Last year’s net loss amounted to 10.35 yuan per share.
The total revenue has increased by almost 25% to € 1.84 billion yuan ($263.38 million), beating analysts ‘ estimates of $1.63 billion yuan, according to the Refinitiv.
Nio stocks rose by nearly 53 per cent, to $3.70 in morning trading, erasing its year-to-date losses to almost 45%.
Reporting Ambhini Aishwarya and Neha Malara in Bengaluru; Editing by Shinjini Ganguli