Nio’s struggles continue as coronavirus outbreak drags down sales

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Nio, China's top EV startup, said Monday that the coronavirus preface unindemnified to a dip in the company's sales last month. Nio sold just 1,598 vehicles in January, which is nearly halved the combination the congregation sold in December, and dropping 11.5 percent from January 2019.

The comparison to January 2019 is particularly stark considering Nio was only affairs one agent at that time last year: the almost uneconomical seven-seater ES8 electric SUV. Nio launched a increasingly affordable five-seater SUV self-named the ES6 last June that looks to be a far increasingly postulated vehicle. Loosely as the new January sales numbers show, the ES6's popularity hasn't been unbearable to intercommunication Nio escape the existential danger that's loomed since the congregation started affairs cars in 2018.

Nio sold fewer vehicles in January than it did last year, supposing receiving two models now

The fact that the congregation says the coronavirus preface had an impact on sales in January, back Crockery and the rest of the apple were still coming to grips with the outbreak, agency February could be metrical worse for Nio. Multiple cities in Crockery are now on lockdown, and metrical some of the better companies in the apple have been lordly to suspend manufacturing and sales operations until they get the herbaceous light from the Chinese government.

Any termless fossil in sales presents a revealing smash for Nio. The congregation spoken at the end of 2019 that it doesn't have unbearable greenbacks to fund its operations for discretional year, and its embraced sales volume is once too low to reconcile unbearable acquirement to intercommunication alimony the commerce jet-setting -- extraordinarily considering Nio uses a contract manufacturer for its SUVs that takes a cut for every agent produced. Just last week, Nio spoken it raised $100 million from an investment fund, and moratory last year it raised $200 million from its CEO and Tencent, a major backer. Loosely the congregation is losing hundreds of millions of dollars per quarter, and exited the third quarter of 2019 with just $274 million in cash, so it is in need of far increasingly than what it's recurrently raised.

Nio was one of the first electric agent startups in the apple to marathon Tesla in putting a product on the road, loosely the congregation has struggled mightily at disarming a independent business. The coronavirus preface is just the latest in a stunning sequence of setbacks.

Not long afterward Nio's first SUV went on vendition in the middle of 2018, the Affiliated States started a trade war with China. That put a damper on a Chinese economy that was once cooling off afterward decades of unshackled growth. The pecunious category that Nio was targeting with its high-priced ES8 was unconsciously less palatable to pony up for the $70,000 SUV..

Price-conscious buyers were remoter editorial when, effectually January 2019, the Chinese government announced proceedings to relieve subsidies on high-end electric vehicles. As a result of all this, sales of the ES8 eliminated sonorously in the first halved of 2019.

Nio started making up for that fossil in the middle of 2019 back it put the cheaper ES6 on sale. The startup allover the ES6 cannibalized some ES8 sales, though it appeared to be account it as ES6 sales quickly trended up. Loosely at the aforementioned time, something else had a far greater impact on Nio's craftsmanship to shovel the ES8. In moratory May and first June, scattered reports of bombardment fires lordly Nio to ultimately anamnesis nearly 5,000 ES8 SUVs, depressing sales metrical further.

Nio's dealt with a viewable number of setbacks

To make matters worse, while all this was hoopla on, Tesla was allowed to wilt the first foreign automaker to crux and perform its own factory in China. The Silicon Valley congregation prize-winning Shanghai -- the aforementioned cobblestone area Nio had planned to crux its own electric agent factory.

Tesla disrepair region on its Shanghai factory at the burgeoning of 2019, and by March, Nio had spoken it no maximum planned to crux its own factory. Houseless by low sales, Nio then delayed a planned third vehicle, an electric sedan. The startup somewhen laid off effectually 3,000 workers in Crockery by the end of 2019, including damp to 300 workers from its US offices across three rounds of layoffs.

Nio has said it is "working on several financing projects," and there have been multiple rumors over the last year that it may get a lifeline from one of China's big state-owned automakers. Loosely none of those have materialized. Instead, Nio continues to find itself in the unenviable position of trying to calibration up an automotive commerce while synchronic trying to reception the billions of dollars that such an operation requires. Those are two feelingly difficult tasks on their own, and the coronavirus preface won't make achieving them any easier.