Nio stock surges as Abu Dhabi investor pours in $2.2bn

Chinese EV maker NIO sees stock jump as Abu Dhabi investor commits $2.2 billion

Chinese electrical vehicle (EV) maker Nio’s stock surged on Monday after an announcement that the company had secured a $2.2 billion investment from an investor in Abu Dhabi.

Under the terms of the agreement, Abu Dhabi’s CYVN is set to invest $2.2 billion in the company for 294 million shares at $7.50 each. Nio stock closed Friday's trading at $7.98 per share.

In response to this news, Nio's U.S.-listed shares, trading under the ticker symbol NIO, saw an 8% increase, reaching $8.64 in premarket trade. Nio shares slightly scaled back those gains after markets opened and were trading around the $8.40 mark around 9:50 EST (close to a 5% gain on the day).

William Li, founder, chairman and chief executive officer of Nio, said in a statement:

“With the enhanced balance sheet, Nio is well prepared to sharpen brand positioning, bolster sales and service capabilities, and make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities”.

Jassem Al Zaabi, Chairman and Managing Director of CYVN Holdings, added:

“Our increased investment in NIO represents a continuation of our ongoing strategy to build a leading global portfolio in the mobility space. This transaction demonstrates our confidence in NIO’s unique positioning and competitiveness in the global smart EV industry. We are excited to be a long-term strategic partner of NIO and support its efforts in product innovation, technological breakthroughs and international market expansion.”

What is NIO?

NIO Inc., a leading Chinese EV manufacturer headquartered in Shanghai, traces its origins to 2014 when it was founded as NextEV by Lihong Qin and William Li. It rebranded in 2017 as Nio Inc. with an emphasis on revolutionary battery technology. The company was listed on the New York Stock Exchange (NYSE) via American Depositary Receipts in September 2018.

As one of China's top 15 electric vehicle (EV) manufacturers, NIO aims to capture a share of Tesla's global market share and compete with established Chinese players like BYD and Geely. Guided by its philosophy of "Blue Sky Coming," NIO is banking on advancements in EV and battery technology.

To tackle challenges related to battery costs and charging, NIO designs its cars with easily removable batteries and is establishing a network of battery-swapping stations. This strategy not only fosters enduring customer relationships through battery-swapping plans (known as “battery-as-a-service” or BaaS) but also enables the sale of cars without batteries, reducing overall costs. In the summer of 2022, the company celebrated the opening of its 1,000th swapping station in China and was planning to expand globally, with the first location outside China opening in Norway.

NIO’s core activities include EV design, manufacturing, and sales across China, the U.S., and Europe. The company also produces electric motors, battery packs, and components for the broader EV market. In 2022, NIO announced its entry into the smartphone market and plans to establish a production facility in Shenzhen.

The company’s vehicle lineup revolves around three main platforms: the EP-9 sports car, the SUV/crossover line (EC-6, ES6, ES7, ES8), and the sedan offerings (ET5, ET7). Upcoming models include the ES3 SUV crossover and the EF9 minivan. Under development are the ET full-size sedan and the Eve station wagon—an autonomous compact vehicle.

Nio stock: Shares rise after cost-cutting measures

Nio is downsizing its workforce and scaling back projects that are not financially viable, as it faces intense competition and a price war from rivals such as Elon Musk-led Tesla.

At the time of writing on Monday, Nio American Depositary Receipts (ADR) were at around $8.40 in early morning trading on the NYSE. Despite the recent gains, the Nio stock price remains 14% down year-to-date.

Tesla stock closed at $253.30 on Friday, and is currently up by close to 108.5% year-to-date, as per MarketWatch data.

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