Huge investment in Tesla rival Nio to power global expansion

December 20, 2023

Chinese electric car brand Nio has received an investment of US$2.2 billion (A$3.25bn) in cash from an Abu Dhabi-based investment firm that will help it expand globally.

CYVN Holdings has obtained 294 million Class A ordinary shares in the company. This deal follows a US$738.5 million (A$1.09bn) strategic equity investment from CYVN back in July, when it also acquired US$350 million (A$517 million) in Class A shares in the Chinese company.

All up, CYVN now has approximately 20.1 per cent of Nio’s total issued and outstanding shares, and can nominate two directors to its board – provided it retains at least 15 per cent of the company’s outstanding share capital.

Huge investment in Tesla rival Nio to power global expansion — ***ET7***

Once this latest deal is finalised, Reuters reports CYVN will become the largest single shareholder of Nio, although founder and CEO William Li has the most voting power thanks to his ownership of Class C ordinary shares.

Nio says that through this deal, it will work with CYVN and its affiliates “to pursue strategic and technology collaborations in international markets”.

“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,” said William Li.

The company recently confirmed it was cutting a tenth of its workforce and deferring some projects as profitability took a hit from a price war started by Tesla in China.

Nio was founded in 2014 and offers a range of electric vehicles, plus a network of battery-swapping stations across China and a growing number in Europe.

This allows the company to offer what it calls Battery as a Service (BaaS), wherein buyers can pay less for the car and pay a monthly fee for use of the battery and the swapping service.

While it has yet to announce a launch into Australia, it has submitted trademark applications – some of which fell afoul of Audi, which is objecting to them as some of Nio’s model names are quite close to Audi’s.

While Nio just has its namesake brand, it’s reportedly planning on launching a more affordable brand codenamed Firefly, with vehicles targeted at EVs by Renault and Volkswagen, as well as another brand codenamed Alps.

In addition to China, Nio currently sells cars in Norway, Germany, the Netherlands, Sweden and Denmark.

Nio isn’t the only EV manufacturer to see major investment from the Middle East. US-based Lucid is majority-owned by Saudi Arabia’s Public Investment Fund, which is also reportedly set to invest in China’s HiPhi.