Sales for the automaker climbed significantly higher in the fourth quarter of 2020, it reported Monday, though losses also widened more than expected.
The electric carmaker also said that it expected deliveries this quarter to reach between 20,000 and 20,500 units. That would be an improvement over the 17,400 vehicles it sold last quarter, which was already a 45% jump compared to the previous three months.
Shares fell more than 4% after hours, though that followed a nearly 9% climb during regular trade.
On Monday, the company touted its balance sheet, saying it had “achieved a positive operating cash flow” and built up a cash reserve of 425 billion yuan ($6.5 billion).
“I look at that … as a shot across the bow to all the EV makers and all the battery suppliers and the manufacturers,” said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights. “[With] Tesla being the highest profile [player], it just highlighted how careful they need to be with regard to customer complaints and safety.”
Nio has also announced plans to launch in Europe this year, and is exploring entering the United States. Talks for the latter are at a “very early stage,” CEO William Li said on an earnings call.
But concerns remain that the company is overvalued. Nio’s market cap is currently $78.3 billion, with a share price of almost $50.
“To me, an $80 billion market cap for Nio is just not applied when you’re selling 43,000 cars in one market,” said Le, referring to the 43,700 vehicles Nio delivered in China in 2020.
“To be a healthy company, they need to be at 10,000 or 12,000 units [of deliveries] a month.”
Yuqian Ding, head of A-share auto research at HSBC, also expressed caution over the company’s stock.
In a note to clients last week, she maintained her hold rating on Nio, saying that the company still had “to struggle with intense competition.”
“Despite Nio’s strong brand and product traction we also see better quality models and aggressive pricing from competitors,” Ding added.
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