Shares of electric carmaker Nio Inc. jumped as much as 7 percent at the opening bell today after the company said its sales had plummeted across the board — but not nearly as bad as Wall Street had been expecting.
Nio, which is based in China but has U.S. headquarters located in North San Jose, ended the first quarter selling 3,989 cars — roughly half the number of cars the company sold in the fourth quarter. Similarly, sales fell from roughly $500 million last quarter to $228.8 this quarter, Nio said.
The company warned sales would continue to slide this year.
“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,” CFO Louis Hsieh said in a statement.
Inside Nio's U.S. HQ in San Jose The Nio ES8, in front the company's Silicon Valley innovation center at 3200 N 1st St in North San Jose.
Investors expected worse, and pushed the company’s stock higher in the first hour of trading today. Nio ended Friday at $3.86 per share, and jumped as high as $4.14 per share shortly after the opening bell.
The company has taken its investors on a short, rocky ride so far. Nio went public in mid-September 2018 at around $6 per share, and jumped to as high as $13 per share within days. The stock has since plummeted, and reached a new, all-time low last week, when they dipped below $4 per share.
Nio builds and sells its cars in China exclusively. Like its Palo Alto-based rival Tesla Inc., it operates on razor-thin margins. In the fourth quarter, Nio said it operated on a per-vehicle profit margin of 3.7 percent. In its most recent quarter, it lost money on each car it sold — operating at a margin of -7.2 percent.
Nio lost nearly $391 million in its most recent quarter.
The company said it was actively negotiating a commitment worth up to $1.44 billion from Beijing E-Town International Investment and Development Co. Ltd. to build a new factory in Beijing. Nio does not manufacture its own cars, and instead contracts out with a larger Chinese competitor.
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