By Christian Smith
Electric car maker NIO had a turbulent debut on the New York Stock Exchange, but the Chinese company's CFO isn't deterred.
"It's a very choppy market, as you can imagine, especially for Chinese stocks," Louis Hsieh said Wednesday in an interview on Cheddar.
Shares of the electric vehicle company opened at $6 apiece Wednesday, after pricing in its IPO at $6.26 ー already the low end of its expected range ー a day earlier. They fell as much as 15 percent before closing the day up nearly 5.5 percent.
NIO, which counts Tesla as its major competitor, reported a net losses to the tune of $503 million in the first half of the year. As it only delivered its first cars in June, the company didn't bring in revenue until the second quarter. It's so far brought in $7 million, but Hsieh is confident auto sales will accelerate ー and fast.
"Right now is obviously the ramp up phase," he said, adding that "we don't have the volume."
Hsieh said that once NIO hits 130,000-140,000 units, it should have a gross margin of 23-25 percent. The company, however, has a long way before it crosses that threshold.
NIO is on track to ship 3,000 cars this quarter, Hsieh said. And the company is banking on changing Chinese regulations to encourage sales in the near future.
Many of China's largest cities ー including Shanghai, where NIO is based ー have adopted rules limiting the number of gas-powered cars on the road, and more than a dozen other Chinese cities are considering similar regulations.
The Chinese government is also planning to implement a carbon tax, which would increase the cost of driving cars with a combustible engines. All that bodes well for electric vehicles.
At the moment, NIO is producing cars on what the company calls "platform one," which Hsieh said uses technology similar to Tesla.
Sales of cars on platform one will remain targeted at the Chinese market. NIO plans to turn toward markets beyond China with its second platform.
Hsieh said that second platform will operate on technology that is vastly different from anything else on the market. He expects to debut this iteration on the U.S. market in 2021 or 2022.
For full interview click here.