(Bloomberg) – It took about 15 years for Tesla Inc. to lose $ 5 billion. The company known as China's Tesla has made it in four years.
The bleeding persists. Based in Shanghai NIO Inc. According to the average of two analyst estimates, it is ready to report on Tuesday that it will receive another 2.6 billion yuan ($ 369 million) in the second quarter – approximately $ 4 million Dollar a day – lost. This would lead to accumulated losses on the company, which is owned by the technology group Tencent Holdings Ltd. (19459005), to about $ 5.7 billion since William Li founded the carmaker in 2014. Recalls have caused NIO to plummet by 74% since its market value hit a record 11 around a year ago Reached $ 9 billion. More generally, reversing the company's assets shows why concerns are growing that China is creating an electric vehicle bubble that could soon burst.
"There will be a lot of card blends for EV startups this year and next," said Siyi Mi, an analyst at BloombergNEF. "Risk capital was behind them in the past, but that's not the case today."
The total sales of electric vehicles in China, where half of the world's electric cars are sold, fell in July for the first time after the government cut back the subsidies. Deliveries declined again in August, raising doubts that one of the last strengths of the broader Chinese auto market, which has dropped by 1
China has cut subsidies for new vehicles. fuel-cell all-electric cars and plug-in hybrids – since 2017 to help the industry stand on its own and avoid a bubble. This is undermining growth and causing leading Chinese electric car maker BYD Co. to warn recently that profits will slow.
At NIO, the pressure is growing to raise more funds. According to the company, the car manufacturer aims to reduce its workforce by 14% to 7,500 by the end of the month. Incidents of burning or smoldering batteries forced NIO to recall about 4,800 vehicles – more than 20% of all ever sold cars. Deliveries decreased in the second quarter compared to the previous three-month period.
The company also scrapped the plans for a production plant in Shanghai after the government decided to financially support Tesla. Instead, NIO markets the production of its ES6 and ES8 cars to Anhui Jianghuai Automobile Group Co.
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