- The Chinese electric-car maker Nio posted a narrower-than-expected first-quarter loss and beat revenue expectations despite the Chinese economic slowdown.
- The Tesla rival’s shares rose nearly 5% in pre-market trading Tuesday.
- Watch Nio stock trade live.
The Chinese Tesla rival Nio posted a smaller-than-expected first-quarter loss, according to the company’s earnings report, as the Chinese economic slowdown took hold and following the reduction of electric-vehicle subsidies in China.
Nio shares rose nearly 5% in pre-market trading after the company reported an adjusted net loss of $373 million for the first quarter, topping the$472 million loss that was expected.
Revenue came in at $243 million, above expectations of $229 million, while deliveries fell by more than half from the previous quarter to 1,124 vehicles.
“Deliveries of the ES8 in the first quarter of 2019 exceeded the Company’s expectation despite headwinds from EV subsidy reductions, slowing macro-economic conditions, increased competition, and seasonal factors around the Chinese New Year holiday period,” said CFO Louis Hsieh.
Looking ahead, Nio’s revenue guidance of $169 million to $193 million fell short of the $284 million that analysts were expecting and represents a decrease of 20% to 30% from a year earlier.
“Looking ahead to the second quarter, we expect an even more challenging sales environment and anticipate overall sequential demand and deliveries to decrease, as competition continues to accelerate and the general automobile market in China remains muted,” Hsieh added.
Nio is currently negotiating a deal where E-Town Investments, a state-owned entity established to support Chinese tech companies, would invest up to $1.5 billion in the start-up. The two companies will establish a joint venture to build a new manufacturing facility for the company’s next generation of vehicles.
In a February interview with “60 Minutes,” Nio CEO William Li criticized rival Tesla. “It‘s like the clothes fashion models wear on the catwalk,” he said in Chinese of Tesla’s cars. “It’s not the same. They may be beautiful, but you can’t wear them every day.”
Tesla has announced major expansion plans in China despite analyst concerns the weak Chinese economy, decreased subsidies, and intense competition will weigh on the company’s profitability.
Nio is down 36% this year.
Join the conversation about this story »
NOW WATCH: Warren Buffett, the third-richest person in the world, is also one of the most frugal billionaires. Here’s how he makes and spends his fortune.