Nio Inc warned there may be substantial doubt about its skill to proceed as a going concern on Wednesday, prompting the cash-strapped electrical automobile maker's shares to stoop.

The EV startup, which is backed by Chinese language web big Tencent and had been seen as a rival to Tesla Inc., has been hit by dwindling demand and decreased authorities subsidies in China, the world's largest light-vehicle market.

Auto gross sales in China tumbled 42 % within the first two months of the yr in comparison with a yr earlier, whereas gross sales of NEV, which embrace battery electrical, plug-in hybrid and hydrogen fuel-cell automobiles, sank 60 %.

Nio's shares fell sharply on Wednesday, closing down 49 cents, or 17 %, at $2.41 in New York buying and selling, as Wall Road's important indexes slumped within the wake of the spreading coronavirus epidemic.

The lethal viral outbreak has exacerbated Nio's troubles, disrupting manufacturing and supply of automobiles.

Nio delivered 2,305 automobiles in January and February, which was decrease...