(Bloomberg) -- Nio Inc. reported revenue that missed estimates as the Chinese premium electric-car maker continues to weather a bruising price war in its home country.
Revenue rose to 18.7 billion yuan ($2.6 billion) in the three months through September after the company delivered 61,855 cars in the quarter. Nio reported a 4.4 billion yuan adjusted net loss, which was also slightly wider than analysts were expecting.
Nio shares fell as much as 6.9% in early New York trading on Wednesday before recovering to trade 0.7% higher as of 11:19 a.m.
The results show the impact of a bruising EV price war started by Tesla Inc. in China, with most automakers forced to discount their vehicles or throw in more freebies to protect market share. Although initially resistant, Nio also followed suit by slashing the prices of its vehicles by as much as 30,000 yuan last year.
The company is one of the last few EV makers in China that remains committed to producing only battery electric cars, meaning it’s missing out on more profitable hybrids that are outpacing pure electric vehicles. Many rivals including Xpeng Inc., Zeekr and Avatr Technology Co. are now planning to develop extended-range EVs, which come with a small internal combustion engine to recharge the battery.
Nio’s revenue from vehicle sales dipped in the third quarter, mainly because it sold vehicles at a lower average price. The gross margin grew to nearly 11%, roughly in line with estimates.
New models should boost the EV maker’s sales from next year, Chief Financial Officer Stanley Yu Qu said on an earnings call Wednesday.
The automaker said it aims to deliver as many as 75,000 vehicles this quarter, short of analyst estimates. Revenue is likely to increase to as much as 20.4 billion yuan in the fourth quarter, the company said, which is less than analysts were anticipating.
Short-term Hit
Deliveries of Nio’s new mass-market Onvo brand began in September but have been slow because of the time it takes to ramp up production, Chief Executive Officer William Li said on the call.
The delays could have a short-term hit to Onvo’s orders. Customers who had wanted to take advantage of the Chinese government vehicle trade-in subsidy that ends this year may turn away, Li said. Still, there have been tens of thousands of orders for the L60 electric sport utility vehicle.
The EV maker is still aiming to break even in 2026. With another brand called Firefly set to be unveiled next month and new models, deliveries could double next year, according to Li.
In Europe, Nio has had to raise prices in response to the additional tariffs imposed on Chinese EV makers but plans to keep investing in the region, Li said.
(Updated with share reaction.)
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