In a significant development, a subsidiary of Shanghai-based electric vehicle (EV) manufacturer Nio has secured a substantial investment of 3.3 billion yuan (approximately $471 million) from a consortium of investors backed by the Hefei government in eastern China’s Anhui province. This fresh capital injection is expected to provide a much-needed boost to Nio’s product development and technological advancements.
As part of the deal, Nio will subscribe to 10 billion yuan worth of newly issued shares in its subsidiary, Nio China, reducing its stake from 92.1% to 88.3%. The Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment, CS Capital, and other existing shareholders will increase their ownership from 7.9% to 11.7%.
This strategic move will enable Nio to strengthen its balance sheet, maintain its competitive edge in technology, products, and services, and drive sustainable growth. The company plans to leverage this investment to promote its multi-brand strategy, expand into broader markets, and propel itself into the next stage of development.
Notably, Nio has the option to subscribe to an additional 20 billion yuan worth of shares in its subsidiary by the end of 2025, subject to regulatory and internal approvals. This fundraising deal comes on the heels of a $2.2 billion investment from CYVN Holdings, an Abu Dhabi government-controlled investment fund, which raised CYVN’s stake in Nio to 20.1%.
Industry experts believe that securing additional funding is crucial for Nio’s growth, given the intense competition in China’s electric vehicle market. With cash reserves dwindling, some EV players are struggling to sustain operations amid a discount war. Nio’s latest move is seen as a strategic step to stay ahead of the competition and capitalize on growing demand from younger buyers.
The company’s second-quarter results reflected a narrowing net loss and a significant surge in revenue, driven by state subsidies and increasing demand. Nio expects to deliver a record number of EVs in the third quarter, with estimates ranging from 61,000 to 63,000 units. The company recently unveiled its new Onvo brand, targeting car buyers with budgets between 200,000 yuan and 300,000 yuan, and has introduced the L60 sport-utility vehicle to compete with Tesla’s bestselling Model Y.
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