The Chinese electric vehicle market potential is enormous. But NIO — one of its leading players — is in crisis mode. A little more than a year after the company’s IPO, it is running out of cash. Its stock plummeted to an all-time low of $1.19 on October 2, 2019.
Despite a slight jump in share price after positive third- and fourth-quarter sales, and unverified reports of the company getting a billion-dollar round of funding, NIO is still burning through money and facing an uncertain future — in late 2019, hundreds of workers were laid off amid various cost-cutting measures.
China accounts for nearly 50 percent of global EV sales, a number that is only expected to grow as the country’s middle-class population swells to 600 million by 2030. Growing customer interest, stricter restrictions on emissions, and other government policies have led every major car manufacturer, domestic and foreign, to sell electric cars in China.
NIO gained global recognition after favorable coverage on the American TV show 60 Minutes and hype surrounding its flagship supercar, the EP-9, early in 2019. The car was positioned as a luxury lifestyle brand and featured on Amazon’s original series The Grand Tour.
But can the company live up to the hype?