China’s rival to Tesla plans $1.8bn New York listing

Tencent-backed electric car company Nio files for public fundraising in major US flotation

THE Chinese electric car manufacturer Nio has filed to go public on the New York Stock Exchange in a listing that could raise $1.8bn (£1.4bn) for the business.

The company produces electric cars including the EP9 car, released in 2016, and the seven-seat ES8 which it released earlier this year. Nio said that it had delivered 481 ES8 cars by July, and had 17,000 reservations for other electric vehicles.

The Tencent-backed firm will seek to raise $1.8bn in the float, potentially making it the second-largest US listing by a Chinese company so far this year. Video streaming business iqiyi raised $2.42bn in March.

Nio’s filing with the US Securities and Exchange Commission says that the business had less than $7m in revenue in the first half of 2018 and made a loss of $503m.

Nio has often been compared to US competitor Tesla, yet the Chinese business sells its cars more cheaply. The Nio ES8 sells for 448,000 yuan (£50,900), around half the price of Tesla’s Model X in China.

The company has also developed a fleet of mobile charging vans in China which can charge both Nio vehicles, and Tesla’s own cars. It said it plans to launch one car per year but has no plans to sell mass-market cars outside of China.

Nio’s other backers include a private equity fund set up by Baidu, Hillhouse Capital Group and Sequoia Capital.

“Nio is just getting started early,” Yale Zhang, head of Shanghai-based consultancy Automotive Foresight told Reuters of its IPO plans. “(China’s) new energy car industry is just starting, it’s a marathon process.”

Nio’s decision to go public comes as Tesla chief executive Elon Musk announced a plan to take his business private. Mr Musk tweeted on August 7

‘Nio is just getting started early. The new energy car industry is just starting, it’s a marathon process’

that he had “funding secure” to take the business private at a $420 share price.

Since Mr Musk’s tweet, he has announced that he expects Saudi Arabia’s sovereign wealth fund to provide the cash for the deal.

Mr Musk said he had met multiple times with the manager of the fund. “I understood from him that no other decision makers were needed,” Musk said, “and that they were eager to proceed. I left the July 31 meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving.”