The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
NIO Inc., the electric-car maker backed by technology giant Tencent Holdings Ltd., filed for a $1.8 billion initial public offering as it gears up to compete against the likes of Tesla Inc.
The company applied to list its American depositary shares on the New York Stock Exchange under the symbol NIO, and the $1.8 billion registration amount is a placeholder to calculate filing fees.
NIO and other Chinese electric-car makers are raising money to develop new products and fund an expansion as the world’s biggest automobile market signals a shift to battery-powered vehicles in a bid to cut pollution and reduce dependence on imported oil. That technology drive has spawned a clutch of startups from China, all wanting to take on legacy carmakers and Tesla, whose owner Elon Musk is considering taking the company private.
The offering is being led by Morgan Stanley, Goldman Sachs Group, JP Morgan Chase & Co., Bank of America, Deutsche Bank, Citigroup, Credit Suisse Group and UBS Group.
The Chinese company’s move to sell shares in the US comes at a time when Musk is busy setting up a gigafactory in Shanghai to tap a market where the government is promoting new-energy vehicles with incentives to buyers. The CEO has said he plans to take the money-losing company private at $420 a share, valuing Tesla at $82 billion.
NIO, founded by William Li and a group of other internet entrepreneurs, started selling its first vehicle, the ES8 SUV, in December, three years after the company was founded. The vehicle comes with a price tag of $65,000 before incentives.
The company, formerly known as NextEV, is among several startups to have sprouted in China after the introduction of incentives. In January,
Byton, a Nanjing-based company started by former BMW AG executives, became the first Chinese automaker to hold a large-scale unveiling at the Consumer Electronics Show in Las Vegas. Others like WM Motor Technology Co. and XPeng Motors, backed by funding from Alibaba Group Holding Ltd., are also developing new models.