China’s Tesla-killer ready to go public in NY

Lloyd Doyle
August 17, 2018

Nio is backed by Chinese conglomerate Tencent and another giant tech company, Baidu.

In a regulatory filing on Monday, Nio said it is looking to raise $1.8 billion in an initial public offering.

Li Bin, founder and CEO of NIO Automobile, said in an open letter in the foreword of the prospectus that 50 million shares, i.e. one-third of the total shares, will be transferred to "user trust fund".

Nio's move to sell shares in the U.S. comes at a time when Tesla CEO Elon Musk has a plan to set up a big factory in Shanghai, China to corner a market where the government is promoting new-energy vehicles with incentives for buyers. Despite tensions with China over trade, there have been several large Chinese listings on American stock exchanges this year.

As of July 31, Nio has raised more than $2.4 billion, the prospectus showed.

At $1.8 billion, NIO's IPO would also surpass the $1.63 billion float by online group discounter Pinduoduo Inc to become the second-biggest USA listing by a Chinese firm this year.

Sales of so-called new-energy vehicles surged in China from 21,800 units in 2013 to 741,900 in 2017, according to Frost & Sullivan data cited by NIO.

Last November, the company, whose investors also include Hillhouse Capital Group and Sequoia Capital, raised more than $1 billion in its latest fundraising round, led by existing investor Tencent, valuing the firm at about $5 billion.

It started making deliveries of its first volume manufactured EV, the seven-seat ES8, in late June, after unveiling the $68,000 vehicle a year ago. The joint underwriters include Morgan Stanley, Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch, Deutsche Bank Securities, Citigroup, Credit Suisse, UBS Investment Bank and Wolfe Capital Markets and Advisory.

While other Chinese automakers, such as Great Wall Motor Co.

"NIO is just getting started early", said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight of its IPO plans.

NIO incurred a net loss of $502.6 million in the first six months of 2018, its statement said, on $6.95 million in revenues. Nio has so far delivered 481 ES8s and has unfulfilled reservations for more than 17,000 ES8s with deposits.

Other reports by Iphone Fresh

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