Chinese electric carmaker and Tesla (TSLA) - Get Report competitor NIO (NIO) - Get Report moved closer to profitability in its second quarter as rising demand for electric vehicles helped the Shanghai company narrow its losses for the fourth quarter in a row.
NIO said its second-quarter loss shrank to 1.2 billion yuan ($173 million) from 3.3 billion yuan a year earlier. On an adjusted basis, the company lost 1.1 billion yuan, or 1.08 yuan a share, vs. a loss of 3.2 billion yuan, or 3.11 yuan a share a year ago.
Analysts polled by FactSet had been expecting a per-share loss of 1.70 yuan. Revenue nearly doubled to 3.7 billion yuan (US$526.4 million) vs. 1.5 billion yuan in the comparable year-ago period, and was also above analysts’ forecasts of 3.5 billion yuan.
Demand for its ES6 and ES8 electric SUVs continued to attract buyers as the coronavirus pandemic and a return to semi-normalcy dominated Chinese life. NIO said it has delivered 17,702 vehicles so far in 2020, more than double from a year ago.
NIO, which went public in New York in 2018, has both cut costs and borrowed capital to keep itself operational through the pandemic. Gross margin, or revenue minus production costs, was positive for the first time in the second quarter.
Still, NIO lags far behind Tesla, whose registrations in China topped 50,000 in the first half of 2020. Tesla is also prepping to begin producing its Model Y crossover at its Shanghai plant after ramping up output of its longer-range Model 3.
Shares of NIO were up 1.83% at $14.47 in trading on Tuesday.