'Tesla of China' sales plunge amid coronavirus outbreak

Since the end of April, order growth has 'rebounded to the level prior to the COVID-19 outbreak'

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Nio Inc.’s first-quarter loss narrowed from a year ago, but sales plunged 16 percent as the COVID-19 pandemic led to a drop in vehicle deliveries.

The so-called Tesla of China lost 1.69 billion Chinese yuan ($238.9 million), or an adjusted 1.6 yuan per share, on revenue of 1.37 billion Chinese yuan ($193.8 million) in the three months through March, according to unaudited results.

Wall Street analysts were expecting an adjusted loss of 1.85 Chinese yuan per share on revenue of 1.67 billion Chinese yuan.

“We delivered a total of 3,838 ES8 and ES6 vehicles in the first quarter of 2020, representing a 3.8 percent year-on-year decrease, due to the impact of the COVID-19 outbreak in China in the first quarter,” CEO William Bin Li said in a statement.

Ticker Security Last Change Change %
NIO NIO, INC. (CHINA) 41.28 +2.40 +6.17%

Nio delivered 3,155 vehicles in April, up 106% from the prior month. Since the end of April, order growth has “rebounded to the level prior to the COVID-19 outbreak,” the company said.

The Shangai-based electric-vehicle maker had 2.4 billion Chinese yuan ($338.6 million) in cash at the end of the quarter.

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The company on April 29 reached an agreement with a group of investors who will put 7 billion Chinese yuan into Nio China, an entity that will house its core businesses and assets in China, amounting to about 85 percent of the company. Those assets include vehicle research and development, supply chain, sales and services and NIO Power.

Nio, which will inject another 4.26 billion Chinese yuan into the entity, will own a 75.9 percent controlling interest while the strategic partners will hold the remaining 24.1 percent. The investments are expected to take place in five installments during the second quarter.

"The strategic investment will provide sufficient funds to support NIO’s business development, enhance our leadership in the products and technologies of smart electric vehicles, and offer services exceeding users’ expectations,” Li said.

TESLA TO CUT CAR PRICES IN NORTH AMERICA, CHINA

Looking ahead, Nio expects to deliver between 9,500 and 10,000 vehicles during the second quarter, up as much as 182 percent from the prior year. Revenue for the three months through June is projected at 3.37 billion Chinese yuan ($475.7 million) to 3.53 billion Chinese yuan ($499.1 million), up as much as 134 percent year-over-year.

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Nio shares gained 3.73 percent this year through Wednesday.