NIO stock is posting one of its biggest one-day gains in the recent months after NIO Inc (NYSE:NIO) reported a 25.10% jump in October deliveries.
It is now a well-known fact that the Chinese electric vehicle manufacturer is in a bit of trouble, and it has had a pretty torrid time this year. In a new development, the company provided an update on the number of deliveries it made in October, and on a surface level, the numbers seem encouraging. In the month of October, NIO delivered as many as 2,526 vehicles, and that reflects a 25.1% rise from its impressive performance in September. In addition to that, it should be noted that there was a seven-day National Day in October, and despite that, the company managed to raise its delivery figures considerably.
As of the end of October, NIO has delivered a total of 26,215 ES6 and ES8 vehicles. However, out of those figures, only 14,867 were actually delivered in 2019. William Li, who is the Chief Executive Officer, chairman, and founder of the company, spoke about the performance: “Our solid sequential improvement in deliveries continued in October, mainly driven by the hard work and strong execution of our sales teams.”
At the time of writing, NIO stock is up over 14% at $1.73.
Issues Remain for the Company
Despite the latest positive update, it should be noted that there are other issues with the company that have seen NIO stock plunge to new lows. As of now, the stock has lost as much as 70% in 2019, and analysts have raised genuine concerns that NIO might not have enough cash to continue its operations. The company will need a significant injection of cash if it is to survive, and that is a particularly alarming state of affairs, considering the fact that it had received as much as $1.5 billion in funding in May this year from E-Town Capital.
However, it is now becoming clear that the company is in a precarious position and is in danger of going into a tailspin. While the company doesn’t have the necessary funds to be in business for too long, its higher sales are actually putting more pressure on its cash reserves. It remains to be seen how it all pans out in the end.
NIO stock has recovered almost 25% over the past week.
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