NIO Inc surged in US trading after the Chinese electric-car maker paired better-than-expected quarterly results with a warning that it’s still running low on cash.
NIO’s adjusted net loss was $342.9 million for the quarter ended in September, a smaller deficit than the prior three months and what analysts were estimating. While the Shanghai-based company doesn’t have enough money to continue operating another 12 months, Chief Financial Officer Feng Wei said during an earnings call that “significant positive progress” has been made arranging financing by selling equity or debt.
American depositary receipts for the maker of ES6 and ES8 electric sport utility vehicles at one point more than doubled in intraday trading and closed up 54%, the biggest jump since the day after its September 2018 initial public offering. The stock is still down 42% this year.
While NIO has cut thousands of jobs and started to scale back marketing expenditures, its finances remain strained. China’s electric-car market is slowing as the government reduces subsidies, and competition is getting tougher with Tesla starting deliveries of Model 3 sedans.