Nio Inc – ADR (NYSE: NIO) shares, which crossed over the $2 threshold and hit a high of $2.46 last week on the back of a pact with Intel Corporation's (NASDAQ: INTC) Mobileye unit for driverless consumer cars in China, were losing momentum Monday.
The stock is down about 7% following the release of not-so-positive data on electric vehicle sales by the China Association of Automobile Manufacturers, or CAAM.
Sales Drop Yet Again
Sales of Chinese new energy vehicles, or NEVs, comprising electric vehicles and plug-in hybrid vehicles, declined year-over-year for the fourth consecutive year, according to the CAAM.
The association said NEV sales fell 45.6% to 75,000 in October, while production declined 35.4% to 95,000.
This was steeper than the 34% sales drop in September. EV sales and production were down 47.3% and 33.3%, respectively, to 59,000 and 78,000.
NEV sales for the 10-month period ended in October were up 10.1% to 947,000, with EV sales rising 15% to 750,000.
CAAM attributed the weakness to factors including weaker consumer demand and a sharp drop in new energy subsidies.
With these factors continuing to be headwinds in the near term, the association expects the automobile industry in general and NEV sales in particular to continue to be pressured.
The association expects NEV sales to see year-over-year declines in 2019.
"There is a gap between sales to date and where they were last year, so according to the development trend, we may see negative growth for new energy vehicles this year," said Chen Shihua, assistant secretary general at CAAM, according to Reuters.
Nio's Sales Rebound
Following a whopping 50% quarter-over-quarter drop in deliveries in the first quarter and an 8% dip in the second quarter, Nio saw a rebound in the third quarter. Third-quarter deliveries jumped 35.1% sequentially, exceeding the company's guidance of 4,200-4,400 deliveries.
The company followed up with a strong October, when deliveries surged an incremental 25.1% despite the weeklong National Day holiday.
Nio, popularly called China's Tesla Inc (NASDAQ: TSLA), seems to be taking the adverse macroeconomic climate in its stride and going on the offensive with a focus on service.
Nio shares were down 7.83% at $1.82 at the time of publication.
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Photo courtesy of Nio.
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