By Jonathan Garber FOXBusiness
Nio lost $352.8 million in the third quarter.
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Nio, often referred to as the “Tesla of China,” is fighting for its survival, giving Elon Musk another reason to celebrate 2019.
The electric-vehicle maker lost $352.8 million in the third quarter, dropping its cash balance to $274.3 million, according to an unaudited earnings release. By comparison, Tesla turned a profit in the third quarter, surprising its naysayers.
Nio’s continuous operation depends on its “capability to obtain sufficient external equity or debt financing,” the company said adding that is it working on “several financing projects, the consummation of which is subject to certain uncertainties.”
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The company lost an adjusted $2.38 per diluted share as revenue rose 25 percent year-over-year to $1.84 billion. Deliveries were up 35 percent versus a year ago to 4,799 vehicles. The unaudited results were better than analysts were expecting, sending shares soaring.
However, Nio shares have plunged 62 percent this year, lagging the S&P 500’s 29.2 percent gain. Tesla shares have advanced 29 percent in 2019, with much of the gain taking place in the past few weeks.
“The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China,” said William Li, chairman, founder and CEO, in a statement. “Despite the challenges, Nio’s sales improved solidly since September.”
Looking ahead, Nio expects to deliver more than 8,000 units in the fourth quarter, up 66.7 percent from the prior quarter.
Visual China Group via Getty Images/Visual China Group via Getty Images
Nio said in September that it needed to raise $200 million from Li and the Chinese gaming giant Tencent, one of its largest shareholders, after burning through cash at a faster than expected rate. It is unclear if that funding has been secured. A company spokesperson did not immediately respond to FOX Business’ request for comment.
Aside from the unexpected third-quarter profit from Tesla, it has been a difficult year for electric-vehicle makers. In October, the vacuum-maker Dyson killed its $3.1 billion electric-car project, saying it was not “commercially viable,” and Harley-Davidson had to idle production of its electric motorcycle due to battery problems.
Additionally, Jia Yueting, founder of the Chinese electric-car maker Faraday Future, filed for Chapter 11 bankruptcy protection with liabilities of up to $3.6 billion.