Tesla’s most high-profile challenger in China has had a tough year, and 2020 won’t look any easier. Electric car maker Weilai Autos, which has lost nearly $6 billion since its inception in 2014, has invested heavily in marketing and product development to gain a foothold in China’s fast-growing electric vehicle market. Third-quarter results, due as early as Monday, are expected to show that there is still a long way to go to turn a profit.
Although Ithasi has cut jobs and started cutting back on marketing spending, its financial position remains tight. China’s electric car market is slowing as the government cuts subsidies, and competition is intensifying as Tesla prepares to start selling the Chinese-made Model 3.
“The balance sheet of Verizon is a serious liquidity risk,” Sanford C. Robin Zhu, an analyst at Bernstein in Hong Kong, said. The analyst rated the stock as weaker than the broader market. “The key is whether they can announce significant new financing news. “
The company’s share stake has plunged 60 per cent since its initial public offering in New York last year. That’s just $2.6 billion, compared with Tesla’s $78 billion market value.
The root cause of The High Cost is a marketing strategy that ranges from advertising campaigns to so-called NIO House. Customers can gather at the center to spend time, work and eat. This has led to a much larger Tesla burning money than it is.
The first Azure Center opened in Beijing in 2017 and occupies two floors in an area of more than 32,000 square feet. Since then, more than 20 Ulsa centers have been set up, each with a showroom, some with user lounges, cinemas, conference rooms, work areas, libraries, open kitchens and camp activities for children.
“There are a lot of events for kids every week, ” says Yuan Ye, owner of the Tour. Yuan Ye is a mother of four and a regular visitor to the Beijing Azure Center. “It saved me a lot of money from preschool tutoring classes. “
In the second quarter, its sales, general and administrative costs, including marketing and promotions and rentals, were $207 million. Robert Cowell, an analyst at 86 Research, a Shanghai-based securities research firm, said the center and related promotions could account for $72m of that. The carmaker also spent $189 million on research and development.
However, revenue in the second quarter was only $221 million. Although demand has been picking up — the company delivered 4,799 cars in the third quarter ended Sept. The company could lose $381 million in the third quarter, according to an average estimate of four analysts compiled by Bloomberg. In 2020, the average loss is estimated at $1.2 billion and sales are $1.7 billion.
To control costs, The U.S. has moved from adding a Huba Center to opening a much smaller store called NIO Space, which covers an area of about 1,000 to 2,000 square feet. ‘The Center is still important and helps build high-end brands,’ Weilai said in an emailed response.
To stimulate demand, Ithasi has introduced promotional measures, including three years’ interest and a commitment to buy cars licensed by the end of February 2020 to the 2019 state subsidy standard. The company will launch a new SUV, the third SUV in its product line.
As of June 30, the company had to take steps to shore up its capital with only about $500m in cash, equivalents and short-term investments. In September, the company said co-founder Li Bin and shareholder Tencent had each subscribed for $100 million of convertible bonds. Mr. Wei said the bond issue and its financing were proceeding as planned, without elaborating.
“Even with $200m of convertible bonds, there is still a risk of a cash shortfall. Jason Chen, an analyst at Blue Lotus Capital Advisors, said. “It needs more money, faster sales, and significant cost cuts to keep the business going.” “