Cash-strapped Chinese electric vehicle maker NIO said it had substantial doubt about its ability to remain operational in the next 12 months while awaiting new funding to shake off difficulties heightened by the novel coronavirus pandemic.

“Based on the management’s assessment, as a result of the relevant conditions and events including continuous losses, net cash outflows, negative working capital, negative equity and uncertainties on consummation of the financing projects, there is substantial doubt about the Company’s ability to continue as a going concern,” the company said in a news release.

The company’s disclosure on Wednesday, along with the release of its fourth-quarter financial results which showed that its net loss widened 13.6% quarter-on-quarter to 2.86 billion yuan (US$411.5 million) in the last three months of 2019, sent its shares plunging over 16% as of the Wednesday close.

The carmaker, hailed as one of China’s main Tesla challengers, has been fighting an uphill battle with dwindling demand due to the economic slowdown, the prolonged trade war with the US and the Chinese government’s decision in March last year to reduce subsidies for electric vehicles sold in China.

NIO, backed by Tencent Holdings among other investors, has already cut thousands of jobs and shelved plans to construct its own car plant in Shanghai last year as it battles with mounting losses.

“Since NIO rolled out deliveries two years ago, it has sold a little over 30,000 of its two models, a reasonable step but still far from the sales level required for a carmaker to achieve economies of scale,” David Zhang, an independent automotive industry consultant, said, adding that the company had to rely on cash-burning as a result.

“With Tesla rolling out China-produced vehicles, the environment for China’s new carmakers has worsened. The coronavirus outbreak has also disrupted their manufacturing plans,” Zhang said.

NIO founder and chief executive William Li Bin – known as the “Elon Musk of China” – said in September that the New York-listed carmaker had already spent about 20 billion yuan since its founding in 2014 to build up its business. He pledged an improvement in the company’s finances in December, saying he was “very confident” in the competitiveness of its products.

But the ongoing coronavirus outbreak has brought more challenges for the world’s largest auto market, Li said in an earnings call on Wednesday following the release of the financial results, noting that passenger vehicle sales in China slumped 41% in total in January and February compared to the same period last year.

NIO’s cash balance of US$151.7 million as of the end of last year is “not adequate to provide the required working capital and liquidity for continuous operation in the next 12 months”, the company said in the Wednesday release.

“The company’s continuous operation depends on its capability to obtain sufficient external equity or debt financing,” it said, adding that it will “continue to work on financing projects to improve its liquidity and cash position”.

Last month, the company signed framework agreements with the Hefei government including a planned injection of 10 billion yuan in funding and the construction of new headquarters in the city, the capital of eastern China’s Anhui province. The parties are working on the legally binding documents to be signed, NIO said.

The company also raised a total of US$435 million through several private placements of convertible notes in February and March to support its daily operations and business development, it said.