Tesla-rival Nio quarterly sales beat, shares surge driven by higher EV demand

Tesla-rival Nio on Monday beat quarterly revenue estimates on higher demand for its electric vehicles, sending the company’s U.S.-listed shares up more than 13% in trading before the bell.

Sales were up nearly 22% to 1.7 billion yuan ($243 million) from a year earlier. Nio sold 603 units of model ES8 and 4,196 units of its cheaper ES6 model in the quarter.

Nio’s ES8 (picture above), a pure-electric, seven-seater sport-utility vehicle, is widely seen as a rival to Tesla’s Model X.

The company counts Chinese internet giant Tencent Holdings and Hillhouse Capital Management as its shareholders, and raised $1 billion last year in an initial public offering that valued it at $6.4 billion.

China’s Nio said on Monday it did not have adequate cash for “continuous operation in the next 12 months,” adding that it was looking to obtain external financing.

“The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China. Despite the challenges, Nio’s sales improved solidly since September,” said William Bin Li, founder, chairman and chief executive officer of Nio.

The company said that it delivered 4,799 vehicles in the quarter ended Sept. 30 compared with 3,553 deliveries in the second quarter of 2019.

It expects to deliver over 8,000 units in the fourth quarter.

The company also posted a smaller-than-expected loss of 2.38 yuan ($0.34) per share in the third quarter compared with analysts’ estimates of a loss of 2.43 yuan ($0.35).

Total revenue rose nearly 25% to 1.84 billion yuan ($263 million), beating analysts’ estimates of $1.63 billion yuan ($233 million), according to Refinitiv.

Earlier this month, Nio laid off 141 employees in the U.S.

Reporting by Ambhini Aishwarya.

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