China’s battered Tesla rival Nio brushes off coronavirus impact
The NIO Inc. ES6 electric sport utility vehicle (SUV) stands on display at the Auto Shanghai 2019 show in Shanghai, China, on Tuesday, April 16, 2019.
Qilai Shen | Bloomberg | Getty Images
For Chinese electric vehicle company Nio, the worst of the coronavirus impact is pretty much over, CEO William Li said Wednesday.
“Nio hasn’t lowered its annual forecast as a result of the virus,” Li said in a call with reporters, according to a CNBC translation of his Mandarin-language remarks. “There was certainly some impact in the first quarter, but for the second quarter, right now we don’t think there is much of an impact to the original plan.”
He said the virus had primarily affected Nio’s supply chain, which has been fine since the second half of March. The company’s product release schedule and research and development haven’t been affected that much, Li added.
The upbeat tone comes after Nio’s U.S.-traded shares lost more than a third of their value last year amid financial struggles and a slump in the domestic auto market, while Elon Musk‘s electric car company Tesla made progress on its factory in Shanghai.
Nio announced Wednesday that strategic investors would inject 7 billion yuan ($1 billion) into the company, likely this quarter, as part of a previously announced plan to establish its China headquarters in Hefei, Anhui province.
“This raise can certainly resolve Nio’s capital needs for a relatively long period of time,“ Li said. He added he hopes the company can reach profitability sooner rather than later, but patience is needed.
Shares of Nio spiked more than 15% in pre-market trading.
The highly contagious disease, Covid-19, first emerged late last year in the Chinese city of Wuhan. The outbreak has stalled domestically, but has since become a global pandemic, infecting more than 3 million people worldwide and killing over 217,000 people. Attempts to control the spread of the coronavirus have severely disrupted economic activity.