Electric car makers sprout in China
NIO, the electric car manufacturer backed by technology giant Tencent Holdings, filed for a $1.8 billion (R25bn) initial public offering as it gears up to compete against the likes of Tesla.
The company applied to list its American depositary shares on the New York Stock Exchange under the symbol NIO, and the $1.8bn registration amount is a place holder 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 car 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 start-ups 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.
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. Tesla privatised The billionaire has said he plans to take the money-losing company private at $420 a share, valuing Tesla at $82bn.
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 is among several start-ups to have sprouted in China. In January, Byton, a Nanjing-based com- pany started by former BMW 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 and XPeng Motors, backed by funding from Alibaba Group Holding, are also developing new models.
By 2040, more than half of all new car sales and a third of the planet’s automobile fleet – equal to 559 million vehicles – will be electric, according to a global outlook published by Bloomberg NEF.
NIO’s founder Li, also known as Li Bin, said he plans to transfer 50 million shares, accounting for about one-third of shares he owns in the company, to a trust at an “appropriate time in the future”, he said in a letter in a filing to the US Securities and Exchange Commission.
Li will retain voting rights to the stock while NIO users will discuss and propose how to use “economic benefits” from the shares. – Bloomberg