Chinese electric vehicle maker NIO targets £8bn New York listing

CHINESE electric car maker NIO expects to land a valuation of more than $8bn (£6.2bn) when it lists in New York, shrugging off concerns over slowing growth in the country and weak investor sentiment.

Tencent-backed NIO, which will be the first Chinese electric vehicle company to list in the US and a deep-pocketed rival to Tesla, is looking to raise up to $1.3bn by offering 160 million American depositary shares at between $6.25 and $8.25 each. NIO said it will use the cash to further its research and development as it prepares to launch its lower-priced electric vehicle, the ES6, by the end of the year. It began deliveries of the ES8, a seven-seat sport-utility vehicle, in June.

NIO is the latest in a wave of Chinese tech companies to pursue a public listing as it seeks to push overseas into new regions and on the back of loosening listing rules in China and Hong Kong.

According to data from Dealogic, in the period up to Aug 17, Chinese com- panies raised $5.9bn in IPOS compared with the $3.8bn that was raised in the whole of 2017, putting 2018 on track to be the biggest year for Chinese IPOS since 2014.

This trend comes despite warnings from analysts over weak investor senti- ment and amid fears growth could be held back at US and Chinese companies as the trade war ratchets up between Washington and Beijing.

Companies developing electric cars could be among those affected by the trade tensions. It emerged last month that Chinese buyers of Tesla vehicles would have to pay 20pc more than US customers due to higher import tariffs.

Donald Trump has threatened to impose tariffs on all imported cars. US electric car makers will also be hit by higher aluminium prices, as Mr Trump attempts to limit the flow of foreign aluminium and steel into the US.

These growing concerns may already be negatively impacting NIO. The group had originally been hoping to raise at least $2bn in the New York Stock Exchange initial public offering, according to The Wall Street Journal.

The additional details of the plans were released in a regulatory filing just days after Tesla confirmed it was no longer looking to go private. Founder Elon Musk had initially said he was considering taking the company private as he felt it was not productive to stick to a quarterly earnings cycle. Short sellers, who aim to profit from a share price falling, were attempting to harm the company, he said.

Last Friday, however, he rowed back on his plans, saying most investors were keen for the company to remain public and the drawn-out process required to privatise the group would have been a distraction.