Chinese Tesla challenger Nio reports first gross profit since founding in 2014
- Shanghai-based electric carmaker says gross profit for second quarter amounts to US$44.3 million
- Its net loss attributable to shareholders narrows sharply to 1.2 billion yuan
Shanghai-based electric carmaker Nio reported its first profitable quarter since its founding in 2014 on Tuesday.
The company, often referred to as China’s Tesla challenger, said in a filing to the New York Stock Exchange on Tuesday that its gross profit for the second quarter amounted to 313.1 million yuan (US$44.3 million). Its net loss attributable to shareholders for the quarter stood at 1.2 billion yuan, narrowing from the first quarter and 64 per cent below the loss it reported in the same period in 2019.
Its total revenue for the three months through June was 3.7 billion yuan, an increase of 171 per cent quarter on quarter and more than double that it reported in the same period in 2019. Nio sold 10,331 cars between April and June, nearly tripling the numbers sold in the first quarter and in the same period last year. It sold 3,533 cars in July alone, the company said.
Nio’s shares rose more than 10 per cent before markets opened in New York to US$15.75. Its stock has been rising and has soared by 257 per cent since June. On Monday, its shares closed at US$14.21, pushing its market cap to about US$17 billion.
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The carmaker posted a loss of US$1.6 billion in 2019. This year, it has been boosted by local governments in mainland China and investors such as technology giant Tencent Holdings. Tencent increased its stake in Nio to 15.1 per cent in June after acquiring 1.68 million of its American depositary shares (ADS) for US$10 million. The technology giant has become its second-largest shareholder by voting rights after William Li Bin, Nio’s founder and chairman, who holds a 13.8 per cent stake and 47 per cent of its voting rights, according to company’s filing.
The increase in Nio’s gross profit also comes amid a sharp uptick in China’s automobiles industry, which reported a 11.6 per cent jump in car sales and a 22.5 per cent year-on-year rise in total output in June, according to the China Association of Automobile Manufacturers.
