NIO share price: what’s the latest after favourable Q3 earnings?

The electric carmaker delivered a strong Q3 earnings after several disappointing quarters, but the stock remains under pressure with investors fearing the company could collapse without a cash injection.

NIO delivered a decent set of Q3 earnings in October, with vehicle deliveries up 35% from the previous quarter to 4,799, finally sending the stock a touch higher.

However, since the start of the year, NIO has seen its share price fall by more than 75%, from $6.20 a share in January to trade at $1.50 as of 15:25 GMT on Friday.

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Is NIO on the brink of collapse?

Investors are concerned about the strength of the electric carmaker’s balance sheet, with the company receiving a ¥10 billion ($1.45 billion) cash injection from the Chinese government back in May.

However, even a government bailout may not be enough, with the company likely to need a further injection of cash in order to avoid collapse.

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NIO struggles with financing

The Chinese government was forced to step in and offer emergency financing to NIO after the electric carmaker continues to burn through cash at a rapid rate.

In its Q3 results, the company admitted that it had spent $620 million in its second quarter, leaving it with $503.4 million in cash as of June 30.

NIO has also struggled to secure financing from investors, with Tencent meant to assist with the sale of a $200 million convertible notes offering, though it has not been completed and, even it does, it won’t do much with the carmaker haemorrhaging money at its current pace.

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