Electric vehicle startup Nio has ran into trouble and, as a result, canceled plans to build a huge manufacturing facility in Shanghai, China.

The company, recently listed on the New York Stock Exchange, has a deal with state-owned JAC Motors to build its current ES8 and ES6 SUV models. Nio wanted to move forward with building its own vehicles at a new plant, but has decided to continue contract work with JAC instead.

During a recent call with investors, Nio chief financial officer Luis Hsieh revealed that it had $720 million in revenue in 2018 but posted a $1.4 billion net loss, almost double that of the previous year. This comes despite the automaker actually exceeding its delivery and sales targets for 2018, as it built 12,775 ES8 models last year and delivered 11,348 of them.

Can Nio still establish itself as a legimiate Tesla rival?

Hsieh doesn’t expect things to get easier. In a statement, he said the company was expecting deliveries in the first and second quarters of 2019 to drop due to seasonal slowdowns around the Chinese New Year holidays and tough trading conditions triggered by the ongoing trade feud between China and the United States.

Nio’s stock price dropped more than 10 per cent after these announcements were made on Tuesday. Nonetheless, Nio founder and chief executive William Li remains optimistic for the year ahead.

“Looking to the year ahead, we believe that our user community will continue to grow, and we are excited that we are about to begin deliveries of the ES6 and the 6-seater ES8 variant as we remain focused on continued market penetration through enhanced products and services.”

Nio hit the U.S. stock market in September 2018 with an IPO valued at around $1 billion, way less than the $1.8 billion it was targeting.

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