Nio Posts Poor Sales for January
While EV deliveries fell for January, Nio also expects to see declines next month due the coronavirus.
Nio Inc. (NYSE: NIO) announced Monday that its electric vehicle (EV) deliveries have declined to start the year, struggling due to the Wuhan coronavirus epidemic.
For January, the EV maker said in a statement today that it delivered 1,598 cars, down 12% year-over-year. Its five passenger SUV, the ES6, accounted for nearly all of Nio's deliveries at 1,493.
William Bin Li, the founder, chairman and chief executive officer of Nio called the results "satisfactory" and attributed the decline in sales to the outbreak from the coronavirus. In January-February period, the world's largest market for cars is expected to slip by 25% to 30%, as Bloomberg reported last week. That would mark as the 19th consecutive month o falling auto sales in China.
To make matters worse, Nio also expects to continue to face challenges next month as well.
"Looking ahead to February, we expect a reduction in vehicle production and deliveries, compared to the months of peak sales last year, as the Chinese government postponed the return to work from Chinese New Year holiday for most businesses across the country in an effort to fight the outbreak," Steven Feng, the chief financial officer of Nio, said in a statement today.
He added, "We will keep monitoring the situation and continue being part of the joint efforts from the government and all parties in China and across the world against the outbreak."
In early trading on Monday, Nio's stock hit a low $3.62 per American depositary share, which is 5% lower than Friday's close.
Despite Nio posting strong deliveries for December, 2019 was a shaky year for the company as it struggled with subsidy cuts implemented by Beijing in July. However, Nio received some good news after the Ministry of Industry said Beijing would not implement major subsidy cuts this July.
Last week, Nio announced that it was planning to issue around $100 million worth of convertible notes to two Asian-based investment funds. In addition, last eek Nio established a $720,800 coronavirus fund.