Electric Vehicle Maker Nio Eyes Listing Of New China Entity

Electric vehicle (EV) maker Nio Inc’s chief executive said it may list its new Nio China entity, as the cash-strapped company eyed a rebound after selling fewer vehicles during the coronavirus outbreak.

Nio secured a 7 billion yuan ($989 million) investment in Nio China from state-controlled investors last month.

It would make a comprehensive decision about a stock market listing based on capital market conditions, Nio‘s chief executive Li Bin said on an earnings call on Thursday.

Nio‘s total revenue stood at 1.37 billion yuan ($191.46 million) in the first quarter, the company reported earlier, compared with an average analyst estimate of 1.67 billion yuan, according to IBES data from Refinitiv.

The company’s shares fell 3% in early New York trading.

Auto sales in China tumbled 31% in the first four months of this year from a year earlier as the coronavirus outbreak disrupted production and delivery of vehicles.

Li said the company’s overall gross margin was expected to reach 3% in the second quarter, from -12.2% in the first, as the cost of battery packs, a key component, drops.

Nio delivered 3,838 vehicles in the first quarter ended March 31, down from 3,989 vehicles in the same period of 2019. Sales from vehicles fell 18.2% to 1.26 billion yuan, the company said.

However, the company, which is seen as a rival to Tesla Inc <TSLA.O>, added that growth in orders since late April has rebounded to levels seen before the virus outbreak.

Nio said it expects to deliver 9,500 to 10,000 vehicles in the second quarter, while Li expects monthly production in China’s eastern Hefei city to reach 4,500 to 5,000 units in August or September.

Reuters