Tesla Inc was destined to be a multi-billion dollar company when it burst into the electric car business in July 2013. Fast forward 15 years and we see a different story: $5 billion in total losses and no rosy picture insight.
In China, NIO Inc - known as the "Chinese Tesla" - didn't take that long to suffer its own misery: Four years and almost $370 million in losses.
The pain continues for the Shanghai-based Tesla "clone" as the company is seen to make public its losses - estimated at $4 million a day - for the year's second quarter, based on market estimates.
This translates to accumulated declines for the company, which gets a decent amount of funding from tech giant Tencent Holdings Ltd. to around $5.8 billion since William Li established the car manufacturer in 2014.
NIO traded at peaks of $10.16 in the first quarter of 2019, and the company's stock is presently down by 71 percent. The downside has been made worse by China's economic volatility, growing rivalry in the market and a consistent financial weakness for Nio.
Operational budget overruns, laggard domestic sales, and sizable recalls have dragged the Chinese carmaker to collapse 75 percent since its corporate value reached almost a record $12 billion around 12 months ago. The company's major rebound proves why worries are growing that China created its own electric-vehicle bubble that could pop anytime.
"This year and the next, there will be many card-shuffling for electric vehicle startups," Siyi Mi, BloombergNEF analyst, disclosed. Siyi added that in its early days it was the venture capitalists who pursued such vehicle markers, but "it is not the case anymore."
Looking back, it was in June this year that Bloomberg divulged on a potential bubble is in the offing for the Chinese EV market. There are 486 registered EV makers in China, and this just gives an overview of the size of the competition.
NIO could really use more help to be financially sound these days. The company said it is actually looking into trimming down its personnel by 14 percent to 7,500 in the next coming days.
Recent incidents that involved batteries going out in flames or belching out smoke forced the Chinese company to recall around 4,800 cars -- over 21 percent of all the vehicles it has ever sold. Shipment in the last six months fell from the prior period.
