Top News
NIO shares bounce back after shaky US debut
Last Updated: 2018-09-14 11:31 | chinadaily.com.cn
 Save  Print   E-mail

China's Tesla wannabe NIO Inc saw a bumpy debut on the New York Stock Exchange Wednesday, with its shares opening at $6, a 4.15 percent drop from its offering price of $6.26, and rapidly expanding the loss to $5.35 before rebounding to close at $6.60, up 5.4 percent.

The electric vehicle startup, backed by Chinese tech heavyweight Tencent, raised $1 billion in its initial public offering, making it the third-largest IPO among Chinese companies in the United State year-to-date, only after major Chinese video streaming platform iQiyi and online discounter Pinduoduo.

NIO, the first Chinese electric vehicle maker listed in the US, priced the stock near the bottom of its targeted price range from $6.25 to $8.25, which, according to Reuters, was due to bad news coming from its chief rival Tesla Inc.

Tesla's struggles to meet its production targets and an abandoned attempt by the company's CEO Elon Musk to take it private have weighed not only on its own stock, but also on peers in electric car market, Reuters reported.

Founded by William Li Bin in 2014, NIO only started to generate revenues in the first half of this year and is not yet profitable. As data from its prospectus showed, vehicle sales during the six months ending on June 30 earned $6.71 million, yet with net loss of $502.6 million, extending the loss in the year of 2016 and 2017, which, respectively, experienced net losses of 2.57 billion yuan($375.81 million) and $758.82 million.

The Shanghai-based company claims its cars have similar performances as Tesla's, but at cheaper price. Its first commercial product—ES8 pure-electric, seven-seat sport-utility vehicle seen as a rival to Tesla's Model X—began making delivery in June 2018, and sells at a base price of 448,000 yuan, compared with Model X's base price of 920,000 yuan in China.

However, NIO faces the same type of test as Elon Musk's company does—weather it has the manufacturing capacity to deliver on its promises, as Li vowed to deliver 10,000 vehicles to customers by the year end, but fewer than 2,000 units have been delivered so far.

Uncertainties in manufacturing capability and processes, as well as the production volumes required to successfully mass market the ES8 and future vehicles listed in NIO's prospectus as risk factors.

"We cannot assure you that we will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market the ES8 and future vehicles."

China intensified its efforts to encourage the use of new energy vehicles to ease environmental pressure by offering tax exemptions and discounts for car purchases. And the country maintained the largest NEV market for three consecutive years, with 777,000 cars sold in 2017.

NEV sales went up 49.5 percent year-on-year to 101,000 units last month, while production rose 39 percent to 99,000 units, the China Association of Automobile Manufacturers said Tuesday.

Sales of pure electric vehicles rose 31.7 percent from a year earlier in August to 73,000 units while sales of plug-in hybrid vehicles soared more than 130 percent to 28,000 units, CAAM said.

(Editor:富博)

Share to 
0
Related Articles:
BACK TO TOP
  • Sports
  • Soccer
  • Basketball
  • Tennis
  • Formula One
  • Athletics
  • Others
  • Entertainment
  • Celebrity
  • Movie & TV
  • Music
  • Theater & Arts
  • Fashion
  • Beauty Pageant
Edition:
Link:    
About CE.cn | About the Economic Daily | Contact us
Copyright 2003-2024 China Economic Net. All right reserved
NIO shares bounce back after shaky US debut
Source:chinadaily.com.cn | 2018-09-14 11:31
Share to 
0