The Chinese EV maker widens its first quarter losses to around $700 million amid market slump and price war. The company expects to double its deliver
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Nio Inc. expects to see a stronger second quarter performance in spite of increasing losses, to a figure of around $700 million within the first quarter. The Chinese EV maker stated on Thursday that it expects second quarter deliveries to climb to 54,000-56,000 units, which is double that of the same period last year. The company stock price currently sits around $4.91, having declined by around 6.9 per cent.
Nio stated that the company further expects revenue to double from April to around $2.3 billion. In the first quarter, Nio posted that deliveries of vehicles had decreased by 3.2 per cent to 30,000 units; this comes amid a weak start for the EV market in China where increasing competition among brands is causing a price war. Trade tensions with the US and the EU where the possibility of import tariff hikes increasing add to the market slump.
Cutting losses
After lowering prices in a battery-rental scheme, Nio saw sales climb to more than 20,000 units in May. Nio is further attempting to widen its customer base by providing cheaper models, and in order to further cut losses, the EV maker has conducted layoffs and postponed projects which do not bring financial gains in the short-term. Nio has slowed overseas expansion and curbed spending in order to further tackle losses.
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The company has additionally launched a second brand, Onvo, which will primarily be producing affordable electric cars for mass accessibility. Onvo is aiming to rival Tesla models which are locally built in Shanghai. The sub-brand expects deliveries to climb to a figure of 20,000 units per month once it starts delivering from September this year. Nio has also received a regulatory green light to build a third factory which will increase its total production capacity to one million cars, which is close to that of Tesla’s Shanghai plant. Nio further expects to start deliveries of its third brand, Firefly, from the first half of next year.
First Published Date: 07 Jun 2024, 12:53 PM IST