(Bloomberg) — Nio Inc. “fully confident” in meeting its goal of doubling sales to 250,000 electric vehicles this year, chief financial officer Steven Feng said in a move that sent shares of the Chinese automaker in Hong Kong soaring.
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“We are very confident that we will hit our 2023 sales target,” Feng said in an interview with Bloomberg Television on Wednesday. This will be achieved through new models, expanding the company’s charging and battery replacement network, and introducing autonomous driving technologies, he said.
Nio’s stock jumped 8.6% in early trading in Hong Kong, pushing its gains over the past two days to around 18%.
Earlier this month, Nio posted a bigger-than-expected 5.8 billion yuan ($843 million) loss in the fourth quarter as marketing and advertising spending surged. The automaker also reported an annual net loss of 14.4 billion yuan on revenue of 49.3 billion yuan. Gross margin in the fourth quarter fell to 3.9% from 13.3% three months earlier due to a change in manufacturing platform and Covid disruptions.
Feng said the company is “confident” of breaking even at the group level next year. “Strong revenue growth coupled with cost cutting is key to improving profitability,” he said.
Separately, he said that the price war that has broken out in China shows that there are too many automakers in the country. The discount was initiated by Tesla Inc., which first cut prices in October and then further in January. Chinese automakers such as Nio and Xpeng Inc., as well as major international brands such as Volkswagen AG and Ford Motor Co., have followed suit.
“We expect the industry to experience deep consolidation,” Feng said. “Almost everyone agrees that there are too many automakers in China right now, but we don’t plan to buy any.”
In 2022, the company sold 122,486 vehicles, up 34% from a year earlier, after introducing a new SUV and two sedans. However, this growth fell short of the company’s original target because sales were hampered by Covid restrictions in China, which have now been lifted.
Despite gains this week, Nio shares in Hong Kong and the US are down over 50% in the past 12 months. Nio’s value is nearly double that of Ford Motor Co. when its market value peaked at nearly $100 billion in early 2021 and is now valued at less than a third of an American car company.
–With the assistance of Andy Clark.
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