NIO Sells USD 2 Billion Shares In ‘EV Arms Race’, Could Impact Listing Strategy

10th September 2021
NIO Sells USD 2 Billion Shares In ‘EV Arms Race’, Could Impact Listing Strategy

Chinese car maker NIO [ ] is selling USD 2 billion worth of its shares amid an ongoing “EV arms race.”

To strengthen its balance sheet, the loss-making automaker is selling new American depositary shares through an at-the-market offering.

Its shares will be sold over time rather than all at once to institutional investors at an agreed discount.

The deal marks the biggest US equity offering by a Chinese firm since Didi‘s [ ] IPO in June 2021.

“It’s an EV arms race, especially in China, and Nio is aggressively competing with the likes of Tesla and others,” Dan Ives, managing director at Wedbush Securities, told Nikkei.

“This capital raise is a smart strategic move to give the company dry powder as it further ramps up battery innovation and R&D spending in EVs.”

Its US equity approach thereby differs from its rivals. Li Auto [ ] and XPeng [ ] both raised funds as part of their Hong Kong listings.

Its been long anticipated that NIO is seeking a listing in Hong Kong but its US selling might suggest otherwise.

“We think this could reflect further delays in the Hong Kong listing process,” Deutsche Bank analyst Edison Yu wrote in a note.

Considering the intensity of the China’s EV battle, NIO could skip the Hong Kong listing entirely and look towards a China Star Board listing.

Bloomberg Intelligence analyst Francis Chan emphasised that the HK IPO is more about having a Chinese presence rather than money.

“The Hong Kong IPO is less about money-raising, but more about listing in greater China,” he said.

To read more about which Chinese EV makers are winning the race, read Bread’s exclusive insight.

Image credit: NIO

Written by Bread News Team
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