The Chinese electric car manufacturer NIO has secured a billion-dollar investment aimed at strengthening its market position in the highly competitive e-mobility sector. The news of the deal caused the company's shares on the Hong Kong Stock Exchange to rise by 14.7 percent to 55.35 HKD. In pre-market US trading on the New York Stock Exchange (NYSE), the stock also increased by 11.8 percent to 7.30 USD.
As part of the transaction, strategic investors will invest a total of 3.3 billion RMB (approximately 450 million US dollars) in the Chinese subsidiary NIO China. Additionally, the parent company NIO will invest another 10 billion RMB (around 1.4 billion US dollars) to subscribe to newly issued shares of the China unit. Upon completion of the investment, NIO will reduce its stake in the subsidiary from 92.2 percent to 88.3 percent, while the investors, together with existing shareholders, will hold 11.7 percent of the shares.
The investment is still subject to regulatory approvals and the fulfillment of usual closing conditions. According to NIO, the capital is to be disbursed in two installments: 70 percent by the end of November 2024 and the remaining 30 percent by the end of December 2024. Additionally, NIO has the right to invest a further 20 billion RMB by the end of 2025 to subscribe for additional shares – under the same conditions as the current transaction.
In addition to the financial boost from the current capital increase, another development has generated positive sentiment among investors: NIO recently unveiled its new SUV ONVO L60, which is based on the NVIDIA DRIVE Orin platform. The L60 belongs to the new, affordable mainstream family brand ONVO, which was established by NIO to target the broader market.
NVIDIA DRIVE Orin serves as the "AI brain" of the intelligent driving system of the ONVO L60. The system offers a computing power of up to 254 trillion operations per second and enables comprehensive processing of sensor data from high-resolution cameras and 4D radars. This technology supports, among other things, precise recognition of objects at distances of up to 687 meters (cameras) or 370 meters (radar systems).
The new SUV is to be offered at a base price of 149,900 yen (approx. 21,000 US dollars), but without a battery. The battery will be rented separately as part of NIO's "Battery-as-a-Service" model. The concept allows customers to flexibly swap the battery and benefit from current developments in battery technology without having to upgrade the vehicle itself.
The rise in NIO's stock price is not only due to the announcement of the multi-billion investment, but also to the successful collaboration with the chip manufacturer NVIDIA. The technological advancements and the strengthening of the capital base position the company well for the coming quarters and raise hopes for further growth in the highly competitive electric vehicle market.
