The 'Tesla of China' craters 30% after announcing a bigger-than-expected loss and thousands of job cuts
- Shares of Nio, an electric carmaker that's often referred to as the "Tesla of China," saw its two-day loss extend as far as 30% after reporting a bigger-than-expected loss for the second quarter.
- Nio's losses amounted to more than $478 million, exceeding the $365 million loss expected by analysts surveyed by Bloomberg.
- The carmaker also said it plans to cut thousands of jobs. It will also explore spinning off "non-core businesses by year-end" in an effort to control costs.
- Watch Nio trade live on Markets Insider.
Shares of Chinese electric car manufacturer Nio extended their two-day decline to as much as 30%, dipping more than 21% on Tuesday alone. The skid comes after the company reported a wider-than-expected loss for the second quarter and announced thousands of layoffs.
Here's the key numbers from Nio's second-quarter earnings report:
- Revenue: $1.5 billion, up more than 3,000% from the same period last year
- Net income: -$478 million, an 83.1% increase from the same period last year and above the $365 million loss expected by analysts surveyed by Bloomberg
- Gross Margin: -33.4%, compared to -13.4% during the first quarter of 2019
- Vehicle Deliveries: 3,553, down from 3,989 during the first quarter of 2019
The company said it plans to reduce headcount from 9,900 to 7,800 and to explore spinning off some "non-core businesses" by the end of 2019.
"In response to the overall tempered market conditions, we are also working hard to maximize returns on our resources and have implemented comprehensive efficiency and cost control measures across the organization," William Bin Li, the chief executive officer of NIO, said in a press release.
Li continued: "These measures aim to further improve efficiency and streamline operations within our sales and service network and R&D activities."
Nio also cancelled its second-quarter earnings call after announcing the results, according to a statement from the company.
Nio's slowing sales, weak vehicles deliveries, and compressed margins indicate the state of the electric vehicle market in China could be declining. Electric vehicles sales in China dipped for the first time in July and August after the government reduced purchase subsidies.
Nio's business is also still recovering after the company was forced to recall close to 5,000 vehicles in late June following reports of its ES8 SUV models catching fire.
Shares of Nio are now down roughly 68% year-to-date.
