China Car Forums - View Single Post - Nio (NextEV)
Thread: Nio (NextEV)
View Single Post
Old 09-24-2019, 04:38 AM   #31
Join Date: Nov 2013
Posts: 7,682
Default Re: Nio (NextEV)



Cost overruns, weak sales, and major recalls have led NIO to plunge 74 per cent since its market value hit a record US$11.9 billion about a year ago. More broadly, the company’s reversal of fortune illustrates why concerns are mounting that China created an electric-vehicle bubble that may be about to burst.

“This year and the next, there’s going to be a lot of card-shuffling for these EV startups,” said Siyi Mi, an analyst at Bloomberg NEF. “Before, venture capital chased after them, but it’s not the case any more.”

China has gradually scaled back subsidies for new-energy vehicles — all-electric, fuel-celled autos and plug-in hybrids — since 2017 to help the industry stand on its own two feet and avoid a bubble. That’s undermined growth, prompting the likes of top Chinese electric carmaker BYD to warn recently that earnings will wane.

At NIO, pressure is building for it to raise more funds. The carmaker is seeking to reduce its workforce by 14 per cent to 7,500 by the end of the month, according to the company. Incidents involving batteries catching fire or spewing smoke forced NIO to recall about 4,800 vehicles - more than 20 per cent of all the cars it’s ever sold. Second-quarter deliveries dropped from the preceding three-month period.


But money is in short supply for the carmaker, which is now counting on receiving as much as 10 billion yuan in funding from an investment firm backed by the Beijing city government.

“NIO didn’t position itself in the right place,” said Yale Zhang, founder and CEO of AutoForesight. “I’m not optimistic about its future in the long run.”

Last edited by dmitra; 09-24-2019 at 04:43 AM.
dmitra is online now   Reply With Quote