NIO gets biggest Q2 losses with sliding of Electric SUV Sales in China

NIO

NIO Inc. works in designing, manufacturing, and selling of the electric vehicles in China, the US, the UK, Germany, and Hong Kong region. It offers the unique concepts of electric SUVs available with different seating plans. It provides energy and service packages to users, including the marketing, designs, manufacturing of electronic power vehicles, batteries, components, and technological developments. The company also provides home charging solutions through different battery concepts. It even provides value-added services. The company works in association with different companies, the most important one is the manufacturing of ES8.

NIO was founded in 2014 and headquartered in the People’s Republic of China. It is called Tesla of China due to its innovative electrical vehicle manufacturing. NIO Inc. reported a bigger loss in 2nd quarter of 2019 with a negative Q3 revenue forecast. It reported a net loss of 18 cents per share on the sales in Q2 and 36 cents in Q1.

The range of Q3 revenue is expected to about $240 million which is almost half the value of its estimated value. The expected number of deliveries is approximately 4400. The Company even aimed at the reduction of global headcount to be about 7800.

Nio Inc. Stock

June 2019 recorded the all-time low record of the stock to 20% with a value of 2.17 per share. Tesla even lost the IPO with 7.5% downfall. NIO has made prime electric SUVs while Tesla looks forward to making the massive production of the SUVs with its Shanghai plant presently under construction. The deliveries from NIO slid for about ten percent in the second quarter.

Falling car sales in China

The Chinese market is facing a slowdown in the sale of their electric concept of cars. NIO is going through a painful period, despite having a great concept of their products. There is a worrying factor for getting new energy vehicles in China, including fuel-cell cars, hybrid cars, and EV vehicles. There are many companies entering China for the new concept of vehicles. The overall auto sales are slumping with a fall over the last year, or so. China is by far the biggest market for electric vehicle concepts and has impacted the bigger companies like General Motors and Ford.

Shares of NIO Inc. have reported the lowest price in its history with the failure of the company to get the consistent cash flow. The company is making its efforts in the expansion of sales and takes the measures for cost reduction. NIO can be expected to make significant progress and the investors who trust this company’s ethics can think about buying the stocks at this phase. However, there is a risk involved in getting associated with NIO stocks as the issues in cash flow can be a hindrance for the stock owners to see the change in the position of the company.

NIO reported worst quarterly loss last week and is expected to restructure business and cut jobs to control this financial situation. The company has only a few weeks of liquidity left which is a big alarm to the shareholders.

About Sumedha Vikram Rewar 9 Articles
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