Losses and production cuts

Nio shares fell after the Chinese electric car maker reported larger-than-expected Q4 losses and warned it will be forced to cut production in the second quarter.

Nio (NIO) shares fell 5.6 per cent after the close of trading on Monday as the company reported mixed Q4 results and warned of a slowdown in production of its electric vehicles due to a global chip shortage issue.

The Shanghai-based electric car maker also announced a drop in deliveries in February compared with January.

Nio's Q4 figures

Nio reported a loss per share of $0.14 (0.93 yuan). Management cited unfavourable currency exchange rates as an explanation for the quarterly loss.

Revenues rose 133.16 per cent year-on-year and 46.7 per cent quarter-on-quarter to $1.018 billion. (¥6.64 billion). Analysts had expected a smaller increase to $1.01 billion. This is the third consecutive quarter Nio has reported strong revenue growth despite the conditions of the coronavirus pandemic. However, the pace of Nio electric car sales declined in February compared to January, from 7,225 to 5,578 units. Deliveries of ES6 crossovers stood at 2,216 units, EC6 at 2,035 units and ES8 at 1,327 units.

For the full fiscal year 2020, Nio delivered more than 43,700 vehicles, more than double the previous year's total deliveries.

In addition, Nio previously announced that its ET7 electric sedan, a Tesla Model 3 rival that was launched in January, will be delivered to Europe in 2021.

The Nio EC6 crossover, in turn, competes with the slightly cheaper Chinese Tesla Model Y, deliveries of which began in January. Two versions of the much cheaper Volkswagen ID.4 are due to start shipping to China by the end of March.

Nio's cash and cash equivalents balance at the end of 2020 was $6.5bn.

Nio's forward-looking statements

Nio said it plans to deliver between 20,000 and 20,500 vehicles in the first quarter, up 15-18% from the fourth quarter.

But Nio executives said that due to the global chip and battery shortage issue, the company will have to return to a delivery level of 7,500 a month in the second quarter.

Nio expects first-quarter revenues of $1.13 billion to $1.16 billion, up 438% to 451% from a year ago and 11% to 14% from the fourth quarter.