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March 25, 2020

Nio expects positive gross margin in Q2 as operations normalise

Chinese electric vehicle startup Nio said it expected to make a positive gross profit margin in the second quarter of 2020 despite the market turmoil caused by the COVID19 coronavirus.

By bcusack

Chinese electric vehicle startup Nio said it expected to make a positive gross profit margin in the second quarter of 2020 despite the market turmoil caused by the COVID19 coronavirus.

Since launching production of its new EC6 battery powered sedan in February, the company had become increasingly bullish about its full year prospects.

Chairman and founder William Li last week said "based on the current trend, we would hope the daily new order intake rate in April to return to the level of last December".

Nio delivered 2,305 vehicles in the first two months of 2020, lower than its original target set before the virus outbreak, and expected to deliver between 1,100 and 1,300 cars in March.

Having resumed production at its Hefei plant in Anhui province late in February, the company expected output to return to normal levels in April.

Li added, despite the virus outbreak, he was "still confident of achieving the preset sales target for 2020", without disclosing numbers. The company delivered 20,565 cars last year, an increase of 81% year on year.

Loss-making Nio last month said the Hefei city government had agreed to invest more than CNY10bn (US$1.43bn) in the company which would help secure its long term future.

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