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Electric & new energy vehicles
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Cash-strapped electric carmaker NIO obtains US$1 billion lifeline from strategic investors

  • The deal calls for NIO to transfer its core businesses and assets into a new company
  • The new firm, called NIO China, will establish its headquarters in Hefei, capital of eastern Anhui province

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Cleaners are seen next to NIO’s self-driving electric concept car, Eve, displayed at during the Auto Shanghai trade show in April of last year. Photo: Reuters
Sarah Dai

Cash-strapped electric vehicle maker NIO has landed definitive agreements for a total cash infusion of 7 billion yuan (US1 billion) from strategic investors, easing concerns about its continued operation.

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The deal made with Hefei City Construction and Investment Holding, CMG-SDIC Capital and Anhui Provincial Emerging Industry Investment calls for NIO to “inject its core businesses and assets in China, including vehicle research and development, supply chain, sales and services and NIO Power,” into a new company called NIO China, the carmaker said in a statement on Wednesday.

Shanghai-based NIO will also invest 4.26 billion yuan in cash into NIO China. Upon completion of the investments this second quarter, NIO will hold a 75.9 per cent controlling equity interest in the new company and the three strategic investors will collectively hold the remaining 24.1 per cent.

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“After receiving the investments from the Strategic Investors, NIO will have more sufficient funds to support its business development, to enhance its leadership in the products and technologies of smart electric vehicles and to offer services exceeding users’ expectation,” said William Li Bin, founder and chief executive of NIO, after signing the new funding pact on Wednesday.
William Li Bin, founder and chief executive of electric carmaker NIO, speaks after signing definitive agreements for new investments totalling US$1 billion from strategic investors on April 29. Photo: Handout
William Li Bin, founder and chief executive of electric carmaker NIO, speaks after signing definitive agreements for new investments totalling US$1 billion from strategic investors on April 29. Photo: Handout
The deal comes after NIO’s senior management raised concerns in a regulatory filing in March about the company’s ability to remain operational in the next 12 months, while it awaited new financing. It posted losses of US$1.6 billion in 2019.
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