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Nio raising more cash amid cost-cutting campaign
NIO Inc, one of China's high-profile electric car startups, disclosed a fresh money-raising push this week, saying it had issued US$200 million worth of bonds and was accelerating cost-cutting programmes to slow cash burn as the firm seeks to attract more investors in a slumping market.
Loss-making Nio is the most prominent among dozens of Chinese electric vehicle (EV) startups vying to become the next Tesla Inc. All are hampered by dwindling demand in the world's largest car market, reduced government subsidies for EVs and nagging concerns over the China-US trade war.
In an unusual move, Nio cancelled a scheduled earnings conference call on Tuesday. But it rescheduled the call on Wednesday after its shares touched a record low of US$1.97.
The company reported a second-quarter loss of US$478.6 million, 25.2 per cent more than its first-quarter loss, after the recall of 4,803 vehicles in June. Nio's revenues fell 8 per cent to 1.41 billion yuan (S$273 million) from 1.54 billion yuan in the preceding quarter. Nio sold 3,140 ES8 cars, down from 3,989 in Q1. It sold just 413 of its cheaper ES6 model.
Nick Wang, Nio Group's head of finance, said the company's gross margins "will still be negative for the rest of the year". But chief financial officer Tung-June Hsieh said Nio has made "significant, positive progress" in its latest fund-raising efforts, without providing details.
In May, Nio signed a pact with a government-backed fund for an investment of about US$1.5 billion.
Nio also announced a US$200 million private placement of convertible notes, split equally between early investor Tencent Holdings and founder William Li.
Nio had US$503.4 million in cash on the balance sheet as of June 30. REUTERS