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Nio CEO Confident Following Rebound In Deliveries: 'Spring For Electric Vehicles Is Near'

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Nio CEO Confident Following Rebound In Deliveries: 'Spring For Electric Vehicles Is Near'

Nio Inc – ADR (NYSE: NIO) has been one of the most volatile stocks in 2019 despite the fairly robust performance of the broader market.

Since the start of the year, the NYSE-listed ADRs of the Chinese electric vehicle manufacturer have shed over 70%, reflecting a weak macroeconomic climate and geopolitical tensions.

These concerns could be things of the past, as the EV market is set for a strong recovery, said Li Bin, the founder, chairman and CEO of Nio, as reported by the National Business Daily. 

Spring Is Near

Nio, invariably referred to as China's Tesla Inc (NASDAQ: TSLA), posted sales in September and October that give Li confidence, especially after  weak performance in July and August.

"Spring for electric vehicles is near" as more manufacturers are "educating the market" and delivering vehicles in China, the CEO reportedly said. 

Slow Start To The Year

Nio sells two EV models: the ES6 launched in June  and an older ES8 model.

The company reported deliveries of 1,805 in January and 811 in February, blaming the slowdown on accelerated deliveries at the end of 2018 made in anticipation of an EV subsidy reduction and the slowdown around the Jan. 1 and Chinese New Year holidays.

The situation improved slightly in March, when deliveries jumped 69.3% month-over-month to 1,373.

Summer Lull Takes Hold

Nio reported 1,124 vehicle deliveries in April following the EV subsidy reduction announced in late March and an economic slowdown in China that was exacerbated by the U.S.-China trade standoff. 

Deliveries remained anemic in May, as 1,089 vehicles were delivered in the month.

The introduction of the ES6 model June 18 helped salvage some pride, as the company improved its sales month-over-month to 1,340 in June.

Deliveries troughed in July, when the company pushed out only 837 vehicles.

With ES6 sales picking up momentum, deliveries improved in August to 1,943 vehicles, comprised by 146 ES8s and 1,797 ES6s.

The weak performance over the first two quarters culminated in the company reporting a wider loss for the second quarter. The company announced restructuring initiatives that included job cuts.

Turnaround Materializes

Nio's fortunes turned around in September, when it reported an increase in deliveries of about 4% to 2,019. 

The company followed up with a strong October, with deliveries jumping 25.1% to 2,526.

Apart from improving external factors, Nio has been proactive in countering the weakness, focusing on services and announcing a collaboration with Intel Corporation's (NASDAQ: INTC) Mobileye for driverless consumer cars in China. 

Nio shares were trading 0.55% higher at $1.84 at the time of publication. 

Related Links:

It's Official: Nio Brings Former Auto Analyst Wei Feng On As CFO

Nio Shares Trade Higher On Report of Chinese Factory Deal Talks

Photo courtesy of Nio. 

Posted-In: electric vehicles EV Li Bin National Business DailyNews Global Media Trading Ideas Best of Benzinga

 

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