Shares of electric vehicle maker, Nio (NIO) have been under pressure.
All on news China will cut subsidies on new energy vehicles, such as electric cars, by 10% this year. Under China’s new plan, it will also extend subsidies for buying NEVs to 2022, and tax exemptions on purchases for two years.
NIO has also been pressured by news there is substantial doubt in its ability to continue as a going concern, said the company in March 2020. “Its cash balance of $151.7 million as of Dec. 31 is not adequate to provide the required working capital and liquidity for continuous operation in the next 12 months,” the company said, as noted by Reuters at the time.
However, NIO is seeing some signs of improvement, too.
All thanks in part to news the company delivered 1,533 vehicles in March 2020 – growth of nearly 117% month over month. The deliveries consisted of 1,479 ES6s, the Company’s 5-seater high-performance premium electric SUV, and 54 ES8s, the Company’s 7-seater high-performance premium electric SUV and its 6-seater variant.
“We are pleased to see the gradual recovery of our production in March, with special thanks to the great support from our supply chain partners since the second half of March,” said William Bin Li, founder, chairman and chief executive officer of NIO. “In parallel with our continued online sales efforts, our in-store visits have also witnessed a gradual pickup. With the continuous support from our loyal user community, we have seen increasing order backlog since February.”
Steven Feng, chief financial officer of NIO, added, “As the COVID-19 outbreak is largely brought under control in China at this stage, we will continue working closely with our supply chain partners to resume normal productions. Meanwhile, we remain committed to roll out NIO Spaces and integrate online and offline sales channels to further boost our order growth.”
In addition, earlier this year, shares of NIO were sent higher on news it was in talks for up to $1.4 billion in funds with the government of Hefei. Reportedly, Nio is one of eight major deals the city is considering to support economic development. “We think the news puts speculation around NIO’s funding issues to bed — at least in the foreseeable future,” said Robin Zhu, an analyst at Sanford C. Bernstein Ltd.
Ian Cooper’s Personal Position in NIO: None
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