(Yicai Global) Oct. 28 -- Nio founder Qin Lihong has said the industry need not fret too much over the firm's future, dismissing speculation that the electric automaker is cash-strapped as a result of its losses, the National Business Daily reported.
Nio is operating normally and has made more than CNY10 billion (USD1.4 billion) in sales, or nearly CNY1 billion a month, the report yesterday cited Qin, who is also the firm's president, as saying at the 2019 World Intelligent Connected Vehicles Conference that ran in Beijing from Oct. 22 to 25.
Speculation emerged that the Tesla rival is hard up after it said on Sept. 24 that its loss widened 83 percent to about CNY3.3 billion in the second quarter from a year earlier, and 25 percent from the first quarter. Its share price [NYSE;NIO] fell by a fifth that day. They have fallen a further 30 percent to USD1.51 since then.
Nio is not necessarily basking in spectacular business results, but it is also certainly not about to go belly up either, Qin is reported to have said.
The Shanghai-based company moves more than 2,000 units a month, priced on average at over CNY400,000 (USD56,612) each, so with service charges included it makes nearly CNY1 billion a month from vehicles, he said.
Its second-quarter loss stemmed from costs related to a battery recall, Qin reiterated. In June, the company said it had recalled 4,803 ES8 vehicles with batteries made between April 2 and Oct. 19 last year over potential safety risks at a cost of about CNY340 million (USD48 million).
Nio had a non-GAAP loss of about CNY22 billion as of June, of which more than CNY10 billion was the result of forward research and development, Chairman Li Bin said in a Sept. 25 conference call with investors.
The firm was set to deliver 4,200 to 4,400 ES8 and ES6 vehicles in the third quarter, up between 18.2 percent and 23.8 percent from the second, it projected in a previous statement that also estimated it will post third-quarter revenue of CNY1.6 billion to CNY1.7 billion, a 5.6 percent to 10.3 percent gain on the second quarter.
Editor: Ben Armour