NIO Inc. founder William Li said the long-term growth potential of China’s electric vehicle market remains in place, boding well for his company even as competition from the likes of Tesla Inc. intensifies.

The country’s auto market has started to recover from the depths of the coronavirus pandemic, and the minuscule market share of electric cars means they have a chance to grab sales from gas guzzlers, Li said in an interview on Bloomberg Television.

But he has his work cut out. Electric car sales have declined for 10 straight months in China and are forecast to drop 14 percent this year to fewer than 1 million units, according to BloombergNEF. Meanwhile, global electric car leader Tesla started deliveries from its massive new Shanghai plant around the start of the year.

“We do compete against each other, but in general we are allies,” Li said, stressing both are trying to win users from gasoline rivals. “In fact, our sales kept growing since Tesla started production in Shanghai.”

NIO predicted that its deliveries and revenue this quarter will more than double from a year earlier, as well as from the first three months of 2020. The company also reported a narrower first-quarter loss after curbing spending.

In April, the company struck a definitive pact for a 7 billion yuan (US$1 billion) investment from entities led by the Hefei Municipal Government in China, alleviating concerns that it is running out of cash. That funding and potential future financings have put NIO on a solid footing, Li said.

“We are confident to have secured sufficient funding for the company’s development,” Li said.

The April fundraising effort paves the way for more Chinese financing for New York-traded NIO, Li said. (SD-Agencies)