Nio Inc warned there is substantial doubt about its ability to continue as a going concern on Wednesday, prompting the cash-strapped electric vehicle maker’s shares to slump.
The EV startup, which is backed by Chinese internet giant Tencent and had been seen as a rival to Tesla Inc., has been hit by dwindling demand and reduced government subsidies in China, the world’s largest light-vehicle market.
Auto sales in China tumbled 42 percent in the first two months of the year compared to a year earlier, while sales of NEV, which include battery electric, plug-in hybrid and hydrogen fuel-cell vehicles, sank 60 percent.
Nio’s shares fell sharply on Wednesday, closing down 49 cents, or 17 percent, at $2.41 in New York trading, as Wall Street’s main indexes slumped in the wake of the spreading coronavirus epidemic.
The deadly viral outbreak has exacerbated Nio’s troubles, disrupting production and delivery of vehicles.
Nio delivered 2,305 vehicles in January and February, which was lower…