China’s Geely and Nio in upbeat auto news

Geely has struck a deal with German auto giant Daimler to build engines for hybrid vehicles; while Nio says it is approaching profitability on higher electric car sales

by Jon Macaskill
China’s Geely and Nio in upbeat auto news
Geely will work with Daimler on hybrid vehicle manufacturing in China. Image: Reuters

(ATF) Daimler will work with China's Geely on next generation combustion engines, an official said on November 17. “The companies plan to develop a highly efficient modular engine,” a spokesman for Daimler told Reuters, adding that it would be used in hybrid drive-trains and manufactured in Europe and China.

German factories will be retooled gradually to build electric drive-trains while the manufacture of combustion engines will continue in Germany, Daimler said.

The alliance was first reported by German business daily Handelsblatt on Tuesday, citing company and industry sources.

Most of the engines will be made in China, Handelsblatt said. The alliance with Geely, which owns a 9.69% stake in Stuttgart-based Daimler, means that parts of an existing partnership with Renault will be scaled back.

Handelsblatt said the Daimler-Geely pact would save the German carmaker a “triple-digit million sum” – implying an amount above €100 million.

Nio reports EV sales jump

Separately on Tuesday, Chinese automaker Nio said its net loss narrowed to $154.2 million in the third quarter as electric-car sales jumped, providing some vindication for investors who have pushed the Chinese manufacturer’s shares up roughly 1,000% this year. 

Nio is cementing its role as main challenger to Tesla in China’s premium electric-vehicle segment as shares in both firms remain sharply higher for the year.

Tesla will join the S&P 500 index next month, which should create further demand for its shares and Nio’s strong third-quarter sales could also help to boost its stock, which had been impacted by a critical recent report by short-seller Citron Research.

“We achieved a new record-high quarterly deliveries of 12,206 ES8s, ES6s and EC6s in total in the third quarter of 2020, followed by the best-ever monthly deliveries of 5,055 vehicles in October,” said William Bin Li, founder, chairman and chief executive officer of Nio in a statement.

“In view of the growing market demand for our competitive products, we are motivated to continuously elevate the production capacity to the next level. We expect to deliver 16,500 to 17,000 vehicles in the coming fourth quarter,” he added.

“In the past months, we are pleased to have launched the BaaS and the 100kWh battery pack with proprietary thermal management and significant performance enhancement... Going forward, we remain committed to deploying more resources into the core technology innovations and delivering the best holistic product and service experiences to our user community in the pursuit of fortifying our long-term competitiveness in the market,” said Li.

“With another quarter of record high deliveries in the third quarter of 2020, plus further improvements in average selling price, material cost and manufacturing efficiency, our vehicle margin increased to 14.5%. Additionally, we achieved positive cash flow from operating activities for the second sequential quarter,” Nio's chief financial officer Steven Wei Feng said.

“Our order growth momentum continued steadfastly, driven by the expanded brand awareness, growing user base, extended sales network and most importantly, the compelling products and technologies. Meanwhile, our continuous improvement of operational efficiency, cash flow and balance sheet has laid a solid foundation for our future sustainable growth and decisive investments in technologies."

ALSO SEE:

China ignites electric car production

Who killed the gasoline car? The future of electric cars

India wakes up to march of electric vehicles

New energy vehicles will reach 20% by 2025: China auto group

China Auto Geely Nio upbeat news Daimler engine deal hybrid vehicles electric vehicles Nio sales up Tesla