China’s Nio Inc expresses plans of expanding to Europe
- China’s Nio Inc expresses plans of expanding to Europe.
- The electric carmaker's stock tanked 80% last year.
- Nio Inc delivered a record 3,740 vehicles in June.
In an announcement on Friday, Nio Inc. (NYSE: NIO) expressed plans of expanding its operations to Europe. China’s largest electric car manufacturer listed in the United States in 2018 and is considered a competitor of the market-dominating, Tesla Inc.
Shares of the company were reported about 7% up after an hour of market open on Friday to print an intraday high of £11.11 per share. On a year to date basis, Nio is currently more than 275% up in the stock market. Learn more about why prices rise and fall in the stock market.
Nio Inc. was once at the verge of bankruptcy
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In 2019, the company met with mounting financial challenges that resulted in a massive 80% decline in its stock. At the peak of its struggle, the company was reported to be at the verge of bankruptcy.
The financial troubles also pushed the company into aggressive layoffs while many of its executives voluntarily decided to exit their roles. Nio’s co-founder, Jack Cheng, resigned from the company in August last year.
Amidst COVID-19 that weighed heavily on global car manufacturers, Nio secured £760 million in financing from investors, many of whom were state-backed entities. In June, the Chinese company boasted vehicle deliveries to have surged to a record-high of 3,740. In the second quarter as a whole, Nio delivered 10,000 vehicles.
Chairman William Li’s comments
In a talk with CNBC, Founder and Chairman William Li of Nio Inc. said:
“We hope in the second half of next year we can begin making some preliminary attempts in some countries that are more welcome to electric vehicles. We hope to begin with Europe.”
Li refrained from naming specific countries where the company plans on expanding its footprint. But he was confident that the electric car manufacturer will penetrate several global markets in the next three to four years.
At the peak, Nio had a workforce of 600 employees at its office in the United States. As of Friday, it has a smaller U.S. workforce comprising 200 employees instead. At the time of writing, the Shanghai-headquartered company has a market cap of £12.94 billion.
In separate news from the global auto sector, Toyota said on Friday that vehicle production is likely to be 1% higher in September than originally planned as its manufacturing plants resume operations after months of COVID-19 disruptions.