Cash-strapped Chinese electric vehicle (EV) maker Nio stated Wednesday there was substantial doubt in its skill to continue as a going concern, pushing its shares down 12% in premarket U.S. trading.
The car manufacturer, seen as a challenger to Tesla, has been harmed by dwindling demand and reduced government grants for EVs in China, the world’s largest car marketplace.
The coronavirus pandemic has exacerbated the company’s promises this year, disrupting the production and delivery of its cars.
Its cash steadiness of $151.7 million as of December 31 shouldn’t be enough to provide the essential working capital and liquidity for continuous operation in the following 12 months, the corporate stated in a statement.
In 2019, it signed framework agreements with Hefei’s city government to boost over 10 billion yuan and set up new manufacturing centers.
The corporate further made a number of private placements of convertible notes in February and March for a combined principal amount of $435 million to support its operations and enterprise development.
Car sales in China plunged 18% in January while sales of battery-electric and other so-called new energy autos dropped 54.4%, preliminary data from the China Affiliation of Automobile Manufacturers (CAAM) confirmed.