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China's Nio posts bigger-than-expected loss, slowing EV sales growth in first-quarter

Published 03/01/2021, 05:14 PM
Updated 03/02/2021, 01:30 AM
© Reuters. Logo of the electric vehicle maker NIO is seen at its store in Beijin

(Reuters) - China's Nio (NYSE:NIO) Inc posted a wider-than-expected loss and flagged a slowing pace of deliveries for its electric vehicles (EV) in the current quarter, sending its U.S.-listed shares down 7% in extended trading.

Nio, which makes the ES8 and ES6 electric sport-utility vehicles, said it expects to deliver 20,000 to 20,500 vehicles in the first quarter - up 15% to 18% from the fourth quarter.

The forecast, however, is slower than the 42% growth it reported between the third and the fourth quarter, in line with seasonal slowing in auto sales in China overall.

Last April, Nio received a $1 billion funding injection from the Chinese government, which has also helped the company tame recalls and stem falling sales.

It still lags Tesla (NASDAQ:TSLA) Inc, which dominates the EV market in China, and also faces competition from homegrown rivals such as Xpeng Inc.

The company delivered 7,225 vehicles in January and 5,578 units last month, as China's factory activity expanded at the slowest pace in nine months on weak overseas demand and coronavirus flare-ups.

By comparison, Tesla delivered 180,570 vehicles during the fourth quarter.

"For the first half of this year, we would like to be more conservative," Nio's CEO William Li said on an analyst call, citing constraints of battery suppliers and a global semiconductor shortage that has plagued most carmakers.

"For the second half of this year, we are quite confident about the demand, but we do not have the full visibility yet," he said.

Li also said the company might launch a mass-market car without offering details. Nio launched its first sedan model ET7 in January.

Nio shares soared over 10-fold last year, with its market capitalization overtaking that of Detroit automakers Ford and General Motors (NYSE:GM), as China led the global automobile industry's recovery from the pandemic. But as of Monday's close, its stock is up only 2% this year.

It reported a fourth-quarter net loss of 1.49 billion yuan ($230 million), compared with the average estimate from analysts for a 757 million yuan loss, according to Refinitiv data.

© Reuters. Logo of the electric vehicle maker NIO is seen at its store in Beijin

($1 = 6.4648 Chinese yuan)

Latest comments

Nio is on the right track.
Great company, lovely EV and Crazy Valuation!
A typical chinese Scam, drove up the price a couple months ago with all the ‘hope’. Sold huge stocks. Now delivery this to drive the price down. Rinse n repeat.
You have literally zero knowledge in this topic. Your comment is irrelevant.
Beautiful Company, I love NIO, they are doing fantastic job and their stock price doing good as well.
I told you guys... Nio is going to dominate EV...
China is a 3rd World country
What do you mean Steve.
China can be 3rd world, but their 3rd world now has no more poverty. While in US, 1st, with homelessness everywhere. And the 1% own 95% of the wealth...
You need to visit China.
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