NIO (NYSE: NIO) inventory was buying and selling down this morning after the corporate launched its Q1 earnings outcomes. The Shanghai-based electrical automobile (EV) producer printed the outcomes for its NYSE-listed inventory at 8:00 am New York time (GMT-4).

Adjusted earnings per share (EPS) have been down $0.33, barely decrease than analyst’s expectations of a $0.30 decline. Income got here in at $1.37bn, down 7.2% yr on yr (yoy)and lacking analyst expectations of $1.44bn.

Traders reacted negatively to the outcomes, with the share price falling 6.6% in pre-market buying and selling.

A tough yr for EVs

The NIO share price spent a lot of the previous yr in decline, after hitting a excessive of $15.46 in August final yr. It’s down 41% this yr however stays up 91% over 5 years. Earnings have been detrimental for a while and whereas income is forecast to proceed rising, it could possibly be a while earlier than the corporate turns into worthwhile.

Its whole debt has now grown to over £3.2bn, though it’s nonetheless a good means under its $11bn market cap.

Nevertheless it’s not simply the NIO share price struggling. It appears the broader EV trade has had a tricky yr. Fellow Chinese language EV producer XPeng is down 42.3% and even market chief Telsa is down virtually 30%.

Some imagine the troubles are a results of the lingering results of China’s drawn-out Covid lockdown interval. 

Tech challenges

Nevertheless, not each automotive maker is within the doldrums. Lesser-known Chinese language EV producer Li Auto just lately introduced a 53% yoy improve in deliveries for Q1. What’s extra, its new Mega vary fleet of autos can absolutely cost in simply 12 minutes — sooner than it may well take to fill a tank of gasoline. If the identical know-how is adopted by different producers, it might current a big problem to NIO’s battery-swapping tech.

Battery-swapping know-how has change into a key promoting level that NIO has put some huge cash into recently. The tech permits drivers to quickly swap out their empty battery for a fully-charged one, somewhat than wait the various hours required to recharge. Nevertheless, the brand new infrastructure required to help the tech might run into billions of {dollars} — probably pushing NIO additional into debt.

Report gross sales in Could

Regardless of the various challenges, earlier this week NIO revealed file automobile gross sales of 20,544 for Could, beating its earlier file set in July final yr. The expansion represents a rise of 233.8% yoy, bringing whole gross sales this yr up to 66,217. Certainly one of NIO’s key rivals, BYD, loved comparable success in Could. It had its second-highest promoting month with 331,817 gross sales, barely under its December 2023 file.

BYD has secured its place because the main EV producer in China by promoting finances autos for as little as $9,700.

NIO additionally formally launched its new Onvo model final month. An anticipated improve in advertising and marketing bills to advertise the launch might put additional stress on the corporate’s backside line. The primary automobile within the fleet, the L60, was introduced in April with a price tag of $30,500. The SUV-coupe has been touted as a challenger to Tesla’s Mannequin Y, with decrease power consumption and a 1,000 km vary.