In faster times it basked in the spotlight as domestic and foreign media often dubbed it “China’s Tesla.” But now electric car maker Nio Inc. is telling the world it may be running on fumes as the company rapidly burns through cash with no sign of profits in sight.
The dire outlook was buried at the bottom of the company’s newly released results, where management drew attention to its “continuous losses, net cash outflows, negative working capital, negative equity and uncertainties on consummation of the financing projects” it would need to keep funding its business.
“As a result of the relevant conditions and events … there is substantial doubt about the company’s ability to continue as a going concern,” it said.
The gloomy outlook sparked a sell-off of Nio shares, which tumbled 16% in New York after the announcement.
On Wednesday the company reported its revenue slipped 17% to 2.8 billion yuan in last year’s fourth quarter, following a sharp scale-back in government incentives for electric vehicles midway through the year. The bottom line was slightly better, with Nio’s quarterly net loss narrowing 18% from a year earlier to 2.86 billion yuan.
More worrisome, the company’s available cash stood at just over 1 billion yuan at the end of the quarter, noticeably less than the 8.4 billion yuan in its coffers at the end of 2018.
Contact reporter Yang Ge (email@example.com)