Nio Stock Tumbles as Tesla’s EV Rival Reports Bigger Losses and Plans to Cut Production in Q2

By Mariliana Fotopoulou Tuesday, March 2, 2021

Nio stock price is trading 4.8% in the red in pre-open trading Tuesday after the electric vehicle (EV) company reported a bigger-than-expected loss for Q4.

Nio ES8 vehicle at company headquarters.

Nio Joins the Club, Chip Shortage Hits Production

Nio stock has taken a hit on Tuesday after the company said it lost ¥0.93 ($0.14) per share in Q4 2020. Analysts had expected the EV company to report a loss of ¥0.39 ($0.06) per share.

As for the Q1 guidance, EV business said it is forecasting to generate revenue in a range of
¥7.38 billion ($1.14 billion) and ¥7.56 billion ($1.17 billion), which is higher than the ¥6.64 billion ($1.03 billion) reported in Q4.

“NIO concluded a transformational 2020 with a new quarterly delivery record of 17,353 vehicles in the fourth quarter of 2020. The strong momentum has continued in 2021 as we achieved a historic monthly delivery of 7,225 vehicles in January and a resilient delivery of 5,578 vehicles in February, representing strong 352% and 689% year-over-year growth, respectively,” said William Bin Li, founder, chairman, and chief executive officer of the company.

“Supported by competitive product offerings, outstanding services and innovative business models, we have won increasing recognition from our users and expect to deliver 20,000 to 20,500 vehicles in the first quarter of 2021.”

Nio stock took another hit when the EV business slashed Q2 monthly production from 10,000 units to 7,500 due to a lack of semiconductor chips and EV batteries. This means the EV business won’t be able to utilize all its production capacities.

The EV company upgraded its manufacturing capabilities in February to be able to produce 10,000 EV units per month. In an interview with CNBC, CEO Li said he expects to ramp up production again in July when the global supply of semiconductor chips is expected to normalize. The EV business hopes to be able to produce 300,000 units in 2022 in two shifts.

In January, Nio stock received a boost after the company presented its “et7” sedan with a starting price of ¥448,000 ($69,000).

Nio is also planning to expand to Europe this year.

“We hope in the second half of next year we can begin making some preliminary attempts in some countries that are more welcome to electric vehicles,” Li said recently.

Nio stock rose about 1,100% in 2020.

Summary

Nio stock price fell almost 5% in pre-open Tuesday after the Chinese EV company reported a wider-than-expected Q4 loss and plans to slash output targets amid a global chip shortage.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

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