Tesla's biggest Chinese competitor surges 45% after losing less money than expected last quarter
Ng Han Guan/Associated Press
Nio, Tesla's chief competitor in China, on Monday reported 2019 fiscal third-quarter earnings that beat analyst expectations and showed a smaller-than-anticipated loss.
Shares surged as much as 45% on Monday.
The company delivered more vehicles than analysts expected, boosting quarterly revenue, while its quarterly loss was narrower than expected.
Shares of Nio, the electric-car maker that is Tesla's biggest competition in China, rose as much as 45% on Monday after the company reported 2019 fiscal third-quarter earnings that handily beat analyst estimates and showed a smaller loss than expected.
Here's what the company reported, versus what analysts surveyed by Bloomberg expected:
Revenue: 1.84 billion yuan, versus 1.74 billion yuan
Adjusted loss per US depositary receipt: 2.38 yuan, versus 2.51 yuan
The company reported a 35% increase in vehicle deliveries from the second quarter, showing a higher demand for the electric cars than previously thought. In the fiscal third quarter, Nio delivered 4,196 of its cheaper model ES6 and 603 of its model ES8, for a total of 4,799 vehicles.
Those vehicle sales brought in 1.7 billion yuan ($242.5 million) in the third quarter, a 22.5% increase from the second quarter and a 21.5% increase from the same quarter a year ago.
"The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China. Despite the challenges, NIO's sales improved solidly since September," William Bin Li, Nio's CEO, said in a press release.
Nio said it expected to deliver 8,000 vehicles in the fourth quarter, which would bring total aggregate deliveries in fiscal 2019 to more than 20,300. The company expects total revenue of about 2.8 billion yuan ($393.2 million), which would be a 53% increase from the third quarter.
Despite the rosy results, the company said in its earnings release that it "operates with continuous loss and negative equity" and that it did not have sufficient cash "to provide the required working capital and liquidity for continuous operation in the next 12 months" but was working on "several" financing projects.
In an interview with Bloomberg News on Sunday, Li said that the company's cost-cutting effort was underway and that it expected a further reduction in the first quarter of fiscal 2020.
Nio was down 62% year-to-date through Friday's close.
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