China's NIO is gaining traction

Nio Inc., a Shanghai based electric vehicle startup, went public on the New York Stock Exchange in September and raised almost one billion U.S. dollars. In its IPO filing, the Tencent-backed four year old company said it generated 6.95 million U.S. dollars in revenue in the first half of 2018, and that it had 6,201 unfilled ES8 model reservations by the end of August, for which non-refundable deposits had already been made.

Nio started the delivery of its first volume-manufactured vehicle ES8 – a 7-seater electric SUV produced exclusively for the China market – on June 28. With a price tag starting at about 448,000 yuan (around 65,000 U.S. dollars), a total of 3,368 ES8s were delivered to customers as of last month, exceeding the company’s initial targets by nine percent. Shipments in October are likely to slow down due to the National Day holidays in China, yet Nio plans to achieve its delivery goal of 10,000 vehicles for the second half of 2018.

However, despite the seemingly exciting prospects, several worrying signs are being discussed among analysts and investors. The most obvious one is Nio’s net loss of 502 million U.S. dollars in the first half of 2018 and 759 million in 2017. In addition, a concern over a potential threat to data privacy was raised by Citigroup Inc. analysts this month and some have questioned whether the SUV was fully ready to enter the market after several minor malfunctioning cases had been reported. The way China’s self-proclaimed rival to Tesla handles these issues might determine the company’s future.