(Yicai) March 6 -- Nio’s shares rose after the Chinese electric vehicle maker said its loss narrowed 7.2 percent in the fourth quarter of last year from a year ago. Its second brand, aimed at the mass market and families, will be unveiled next quarter, the startup also said.

Nio [HKG: 9866] closed 3.1 percent up at HKD43.80 (USD5.60) a share in Hong Kong today, after jumping by as much as 4.9 percent in the morning. Its New York-listed stock [NYSE: NIO] gained 2.8 percent to USD5.48 yesterday.

The net loss was CNY5.4 billion (USD756 million) in the three months ended Dec. 31, Nio said in a financial report released yesterday. Revenue rose 6.5 percent to CNY17.1 billion (USD2.4 billion).

Leveraging the existing electrification and smart technologies as well as infrastructure that Nio has developed, the new Alps brand will likely be 10 percent less expensive than a Tesla Model Y, giving it price flexibility, the Shanghai-based company said on an earnings conference call.

The first Alps vehicle will debut in the third quarter and deliveries will start in the last quarter, Nio said. Development of the second model, a sport utility vehicle aimed at larger families, is making good progress and will launch next year, while development of a third has also begun, it said.

For the full year of 2023, the company’s net loss jumped 44 percent to CNY20.7 billion (USD2.9 billion). Revenue rose 12.9 percent to CNY55.6 billion (USD7.83 billion).

Nio expects to deliver between 31,000 and 33,000 vehicles next quarter, ranging from a 0.1 percent dip to an increase of 6.3 percent from a year earlier, it said. Revenue will likely be between CNY10.5 million and CNY11.1 million, representing a drop of 1.7 percent and a gain of 3.8 percent.

Nio will not join the ongoing price war in the Chinese market. It will focus more on the gross profit of its products than the volume, Chairman and Chief Executive William Li said on the call. 

“So, we will not cut the prices,” he pointed out. “We'll enter the price where we will not realize higher volume at the cost of our compromised margin or gross profit.”

Li said that by being in business in China it was “inevitable that we will face competition from all types of car companies, including companies like Tesla, many startups from China, private companies, well-established ones in China, and also joint ventures and state-owned enterprises.”

“Such competition can actually benefit or bring benefits to the end users,” Li said, adding that capable and competent carmakers and those that care about user experience will survive. “We are confident that we will withstand such competition,” he said.

Editor: Martin Kadiev