(Bloomberg) — Nio Inc. is “very confident” in meeting its goal of doubling sales to 250,000 electric vehicles this year, Chief Financial Officer Steven Feng said, sending shares of the Chinese automaker higher in Hong Kong. .
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“We are very confident in achieving our 2023 sales target,” Feng said in an interview with Bloomberg Television on Wednesday. That will be accomplished with new models, expanding the company’s battery sharing and charging network, and unlocking autonomous driving technologies, she said.
Nio shares rose as much as 8.6% in early Hong Kong trading, taking their advance over the past two days to around 18%.
Hitting the quarter-million sales goal will be a milestone for Nio, which delivered 122,486 cars in 2022. While that was 34% more than the previous year, it fell short of the company’s original target because sales were hampered. by China’s now abolished covid restrictions. However, it now faces intensifying competition in China, where a price war has erupted as domestic EV makers such as BYD Co. and major international brands such as Volkswagen AG and Ford Motor Co. seek to boost sales. sales.
The price cuts show that the country has too many automakers, Feng said. The discount was sparked by Tesla Inc., which first lowered prices in October and then cut prices further in January. Chinese automakers like Nio and Xpeng Inc. followed suit, as did major international brands like Volkswagen AG and Ford Motor Co.
“We expect the industry to go through deep consolidation,” Feng said. “It’s almost a consensus that China now has too many automakers, but we have no plans to buy any.”
The China Association of Automobile Manufacturers on Wednesday urged automakers and local governments to end the price war, saying it is not a long-term solution and the auto market should return to normal as soon as possible. possible.
Earlier this month, Nio posted a wider-than-estimated 5.8 billion yuan ($843 million) fourth-quarter loss as marketing and promotional spending increased. The automaker also reported an annual net loss of 14.4 billion yuan on revenue of 49.3 billion yuan. Gross margins in the fourth quarter fell to 3.9% from 13.3% in the prior three months due to a production platform change and Covid disruptions.
Feng said the company is “confident” to break even at the group level next year. “Strong revenue growth coupled with tighter spending are the key to improving profitability,” she said.
Despite this week’s gains, Nio’s shares in Hong Kong and the US have plunged more than 50% in the past 12 months. Worth nearly twice that of Ford Motor Co. when its market value peaked at nearly $100 billion in early 2021, Nio is now valued at less than a third of the US auto company.
–With assistance from Andy Clarke.
(Adds industry group comment in seventh paragraph.)
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