COVID-19 lockdowns in China have played a major role in Nio Inc (NYSE:NIO)’s first-quarter losses of $281.2 million from $68.8 a year ago. Factory shutdowns hampered the company’s output during the first five months while demand for electric vehicles amid high inflation has increased.
As reported by CNBC, Nio reported an adjusted loss per share of 13 cents, way over the 4 cents in the same period last year. Cash by the end of the quarter was $8.4 billion, down from $8.7 billion as of the end of 2021.
The drop in the company’s gross margin sent shares down by 6% in premarket trading Thursday.
During the company’s earnings call, CEO William Bin Li said tighter margins were also due to the increasing costs of commodities, while he remained positive the electric car manufacturer will recover come the third quarter once the company witnesses the effect of the offsetting cost reductions.
Covid-related lockdowns meant that Nio’s deliveries for the months of April and May were cut to 12,000 units after halting production, while it managed to deliver 25,768 vehicles in the first quarter.
According to the company’s financial report, the net loss attributable to NIO’s ordinary shareholders accounted for US$287.9 million in the first quarter of 2022. This a drop of 62.6% from the first quarter of 2021 and a decrease of 16.3% from the fourth quarter of 2021.
“Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted net loss attributable to NIO’s ordinary shareholders (non-GAAP) was RMB1,285.2 million (US$202.7 million) in the first quarter of 2022, representing an increase of 262.5% from the first quarter of 2021 and a decrease of 25.1% from the fourth quarter of 2021.”
The restrained delivery output in May coincided with Tesla Inc (NASDAQ:TSLA)’s sales recovery in China, with Elon Musk’s company back to 100% production at its Shanghai plant.
According to MarketSmith, Nio shares dipped almost 8% before the open on the stock market Thursday after rising 3.6% to $20.35 on Wednesday, their ninth gain in 10 sessions. Shares recovered their 50-day line in recent days, increasing nearly 50% in the last month.
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