(Yicai Global) March 7 -- Chinese new-energy vehicle maker Nio, which hopes to compete with the likes of Tesla, incurred a net loss of USD1.4 billion last year after selling just 11,348 vehicles.

The loss was almost double its 2018 deficit, according to the Shanghai-based firm's financial report published yesterday, its first since it went public in New York last year. It earned USD720 million in revenue, with more than two thirds coming in the final quarter when it earned a meager 0.4 percent profit margin.

"We have achieved our production and delivery targets for last year, as well as the revenue goal," Chief Financial officer Xie Dongying said, adding that first quarter results will show a sharp decline due to an expected reduction in government subsidies for electric vehicles, a high benchmark set by promotions at the end of 2018, and the week-long Chinese New Year holiday, which took place in February.

Sales and production of its debut model, the ES8, grew rapidly in the final three months after it began delivering the vehicle in limited quantities in the second quarter. Nio made 8,069 in the final period -- almost twice as many in the third -- and delivered 7,980, 144 percent more than the previous quarter.

Xie believes deliveries will remain low in the second quarter as consumers hang tight to see what decisions the government makes regarding EV subsidies and to assess other macroeconomic factors.

Hitting the Brakes

Nio has shelved plans to build a Shanghai factory given the uncertainties in China's EV market this year, and plans to continue making its cars via an original equipment manufacturer. It believes that JAC Motors, which makes Nio cars in Hefei, Anhui province, has the capacity to keep up with demand for the next two to three years.

"Another reason for terminating the Shanghai factory plan is that the Chinese government this year introduced some new policies to encourage vehicle manufacturers and research and development institutions to further develop vehicles through cooperation," Xie said.

China's NEV sales maintained solid growth last year, despite the world's largest auto market facing its first decline in 28 years overall. But concerns over subsidies are forcing manufacturers to be more competitive. Tesla has already lowered the price of eight of its cars in China -- different versions of the Model S, X and 3 -- as it looks to take on local rivals like Nio, BYD and BAIC BJEV.

Editor: James Boynton