Investing.com - Nio slid sharply on Wednesday after the China-based electric automaker reported a wider-than-expected loss, blaming a slowdown in China and weaker SUV demand.
NIO (NYSE:NIO) reported a fourth-quarter loss per share of 3.37 renminbi , wider than the 2.22 billion loss per share consensus, according to estimates from Investing.com. Revenue for the quarter came in at 3.44 billion renminbi, beating expectations of 2.91 billion.
The electric automaker blamed the loss on a slowdown in deliveries, particularly for its ES8, an SUV launched last year in the Chinese market, as demand waned and Chinese consumers held back from auto purchases amid a slowdown in the economy.
“Deliveries of the ES8 in January and February 2019 were 1,805 and 811 vehicles respectively, which reflect a greater than anticipated slowdown in monthly deliveries compared to December 2018,” Nio said.
The company also suffered an overhang from accelerated deliveries toward the end of last year, when Chinese consumers rushed to buy electric vehicles to beat the electric-vehicle subsidy that went into effect this year.
In a sign that optimism may have soured, the company slammed the brakes on the plans to open a factory in Shanghai, raising concerns that slowing auto sales in China are set to continue.
The electric automaker's deeper-than-expected swerve into the red also prompted some on Wall Street to turn bearish.
Bank of America Merrill Lynch dropped Nio to an underperform rating from neutral, citing the company's downgraded forecast for shipments.
For the first quarter, Nio is expecting ES8 delivery to be between 3,500 and 3,800 vehicles, a decrease of 56% to 52% from fourth quarter. The company guided revenue between 1.39 billion renminbi and 1.52 billion renminbi, which would be about 60% to 56% lower year on year.