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NIO is facing an upcoming financial obligation with a $160M convertible bond maturing, as well as an additional $560M convertible bond that can be put back to the company on February 1, 2024, resulting in an expected cash outflow of $720M in February 2024. Additionally, there is another $750M convertible bond that can be put back into the company on February 1, 2025, meaning NIO is facing the repayment of $1.5 billion within the next 18 months.
“We have highlighted our concerns around NIO’s liquidity in the past,” wrote analysts. “We consider this recent $1bn CB raise unlikely to be enough.”
NIO has been burning through roughly RMB 6B (approximately $800M) in cash each quarter, on average, over the past five quarters. As of the end of the second quarter, they had around RMB 30B in cash or cash equivalents, indicating they have enough cash to sustain their operations for about five more quarters.
If the cash burn remains similar going forward, NIO may need to raise additional capital sometime in 2024.
Shares of NIO are down 3.29% in pre-market trading Thursday morning.
