Tesla Rival NIO Introduces New Electric SUV In China

Unprofitable and cash-burning Tesla competitor, NIO, is launching a new electric sports utility vehicle in China.

The new electric SUV would come with a panoramic-view window, Bloomberg first reported. This new vehicle will be NIO's third entrant in its SUV lineup along with the ES8 and ES6, and it will contend with the Tesla Model Y.

To find success in their new product, the company will have to battle intense competition and a Chinese market that is less than buoyant in auto sales. The company that is dubbed as "China's Tesla" will radically have to tread water as it has been plagued by weak sales and losses that amounted to $370 million in the second quarter totaling to $5 billion in four years.

The company's sales were around 11,348 units in 2018 and 6,202 from January to May but have recalled almost 5,000 vehicles after incidents of battery fire.

Sacking and Funding

Apart from their sales and losses woes, NIO also had to sack over a thousand employees and closed down its Silicon Valley office. After the third quarter, its staff was down to 7,800 from 9,000.

The funding for the company is also another issue. In September, it was reported that founder William Li and backer Tencent Holdings Ltd. would provide $200 million to bolster up the unprofitable company, but Bloomberg said it's uncertain whether that investment was completed.

Signs of Improvement?

With the new electric SUV, the company is perhaps banking heavily on its recent bump in sales figures as a slight indication of improvement. The twitter account of NIO tweeted an update to their vehicle sales in November that amounted to 2,528 and with a total of 17,395 in 2019.

"NIO is up and running. After the good sales figures in September and October, it is our primary goal to deliver the orders to our users. All further figures and forecasts will be announced by our new CFO Steven Feng in the next earnings call," NIO told Financial Times after the news publication asked them about their cash balance.

The stock price of the company after their IPO last year is down to $2.42 with a 52-week high of $10.64.