NIO has signed an agreement for a combined RMB 3.3 billion ($471 million) investment in its China unit with three existing state-owned investors, the latest show of strong ties between the electric vehicle maker and the Chinese authorities, and local authority support for the industry.
The three investors, namely Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment Co., Ltd., and CS Capital Co., Ltd. will collectively invest over RMB 3 billion into NIO Holding Co., Ltd. Meanwhile, the US-listed EV maker, with a production base in the eastern Chinese city of Hefei, is set to pump RMB 10 billion in fresh capital into the business through the purchase of new shares in its Chinese entity, according to an announcement.
“As China approaches its 75th anniversary, NIO China has once again received support from shareholders for increased capital. Four years ago, Anhui and Hefei rescued NIO from the intensive care unit,” William Li, NIO’s founder, chairman, and chief executive, said on Sunday in a public post on WeChat, China’s ubiquitous messaging app (our translation). “NIO has transformed from a small seedling into a little tree capable of withstanding some storms. As this little tree grows into a big tree, and eventually into a forest, Hefei and Anhui continue to nurture and cultivate it.”
Hefei Jianheng is a subsidiary of state-owned Hefei City Construction and Investment Holding (Group) Co., Ltd., while Anhui Provincial Emerging Industry Investment is fully owned by the regional bureau of the State-owned Assets Supervision and Administration Commission of the State Council. CS Capital is largely controlled by the State Development and Investment Corporation (SDIC), public records show. The new investment demonstrates the strategic investors’ strong recognition of NIO’s industry leadership, as well as firm support for the high-quality development of the EV industry, the company said in the announcement.
Upon completion of the deal, expected by the end of this year, NIO’s stake in its Chinese entity will be diluted to 88.3% from 92.1% as of last year, with the three investors and others holding the other 11.7%. The deal comes four years after the Chinese EV maker raised RMB 7 billion from the three investors, among others, offering the cash-strapped company a crucial lifeline, TechNode reported.
NIO delivered 128,100 vehicles from January to August, a 35.8% growth from a year earlier, and launched the first model under the mainstream sub-brand Onvo on Sept.19.
