(Reuters) – Nio Inc of China on Monday predicted a slowdown in the growth of its electric vehicle deliveries in the current quarter, as the automaker dispatches larger volumes, causing its shares to drop 7% in the trading period.
Nio emerged as a strong challenger for Tesla in China after it received $ 1 billion in government funding last year that lifted it from the brink of bankruptcy and helped ease cash problems as it struggled with recalls and falling in sales.
While Tesla continues to dominate the electric vehicle market in China, Nio also faces competition from local rivals, such as Xpeng Inc, which in January secured a 12.8 billion yuan ($ 1.98) credit line. billion) of Chinese banks.
Nio, which makes electric sports utility vehicles ES8 and ES6, said it expects deliveries of 20,000 to 20,500 vehicles in the first quarter, compared with 17,353 vehicles in the fourth quarter.
This sequential increase of around 15% to 18% is, however, less than the 42% increase in deliveries reported in the fourth quarter.
The company also said that its deliveries dropped to 5,578 vehicles in February, from 7,225 vehicles in January, at a time when China’s manufacturing activity expanded at the slowest pace in nine months due to weak demand abroad and outbreaks of coronavirus. (https://reut.rs/3bNRfEk)
Nio’s US-listed stocks skyrocketed more than 10 times last year, with its market capitalization surpassing that of Detroit’s Ford and General Motors, while China led the global auto industry’s recovery from the pandemic. But, until Monday’s close, its stock rose just 2% this year.
The company also reported that fourth quarter revenue jumped 133% to 6.64 billion Chinese yuan ($ 1.03 billion) over the previous year.
($ 1 = 6.4648 Chinese yuan)
(Reporting by Ankit Ajmera and Akanksha Rana in Bengaluru; Editing by Amy Caren Daniel and Uttaresh.V)