Nio Jumps 5% as the Chinese EV Maker to Reduce R&D Costs to Hit Break-Even Goal
Nio Inc. aims to reduce research and development spending by as much as 25% as it seeks to reach its break-even target by the fourth quarter.
NIO’s U.S.-listed shares rose over 5% on Wednesday.
Expenses may drop to between 2 billion yuan ($278 million) to 2.5 billion yuan per quarter, or a 20% to 25% decrease from last year, the Chinese electric-vehicle maker said on its earnings call Tuesday.
Chairman William Li expects to see cost-control efforts materialize from the second quarter, after first-quarter revenue missed estimates despite seeing higher deliveries.
He also said the firm has made “major improvements” in restructuring its logistics and streamlining its teams to enhance productivity.
“With that, we are going to witness the savings from the operating spending perspective, and such savings will be reflected in our second-quarter earnings and also the corresponding results,” he added in the call.
The firm said it sees second-quarter revenue between 19.5 billion yuan to 20 billion yuan, in line with the 19.6 billion yuan consensus. It also expects to deliver between 72,000 to 75,000 vehicles this quarter.
The company reported a 6 billion yuan adjusted operating loss for the first quarter, wider than the 5.1 billion yuan loss estimate.
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