Though it's not entirely unexpected.
Nio, China's most direct response to Tesla, is in a very difficult financial situation right now. The company behind the amazing 1,342 horsepower EP9 electric supercar, which previously set the fastest EV lap time at the Nurburgring, and the more mainstream market-friendly ES8 SUV, is quickly running out of cash following a disastrous fourth business quarter last year. The coronavirus pandemic could very well be the final nail in the coffin.
Germany's Automobilwoche has learned the company itself has admitted its "cash balance is not sufficient to guarantee the necessary liquidity for continued operations in the next 12 months." At this point, the only way for Nio to survive would be through major external investments or loan financing. The perfect storm of bad conditions has hit Nio and its end may be near.
Interestingly enough, Nio founder, Chairman, and CEO William Bin Li, is speaking to a very different tune. "As a leading manufacturer of premium electric vehicles from China, we are proud to have served 34,218 Nio customers in 296 cities in China by the end of February 2020. We are well prepared to withstand the headwind and to become stronger in 2020." Financial reality and the coronavirus may dictate otherwise.
Another factor that could hurt the Chinese carmaker is the fact that Tesla managed to get its Shanghai Gigafactory 3 built and running in only 10 months. It's now churning out the Tesla Model 3 and Model Y in large numbers specifically for the Chinese market. Nio simply can't compete with it.
For example, Nio delivered a total of 20,565 vehicles in 2019. Although this number was better than 2018's 11,348 total, Tesla is now building 2,000 to 3,000 vehicles a week in Shanghai, and it's having no problems selling every car.
For now, Nio is still in business but if a miracle investment doesn't happen in the very near future, this once-promising EV automaker will very likely collapse.