Chinese EV-maker Nio says new $989 million investment for product development
A 7 billion yuan ($989 million) investment by investors into Nio China, a new entity controlled by Chinese electric vehicle maker Nio Inc, will smooth its cash flow and guarantee future product developments, its CEO said on Wednesday.
The new investment will boost product development and research, Chief Executive William Li told a news conference, adding it will not impact its existing partnerships with Changan and GAC or the ownership structure of its New York-listed company.
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The investors include state-controlled Hefei Construction Investment Holding (Group) Co Ltd, CMG-SDIC Capital Management Co Ltd, and Anhui High and New Technology Industrial Investment Co Ltd.
He said the coronavirus epidemic has had an impact on Nio's supply chain and sales in the first quarter this year but said the negative impact had passed.
Nio delivered 3,838 vehicles in the first three months this year, and sales and production were recovering in March compared to February.
In a statement, the firm said Nio will inject its core businesses and assets in China, which are valued at 17.77 billion yuan, into Nio China and invest 4.16 billion yuan in it.
Nio will hold 75.9% of the new firm, and investors the rest, once the transactions are completed.
(Also read: Chinese EV maker Nio flags doubts on its future)
The headquarters of Nio China are planned to be located in the Hefei Economic and Technological Development Area. Nio would consider expanding capacity in the eastern city of Hefei if sales demand grew.
In February, Nio said it signed framework agreements with the Hefei city government to raise funds in excess of 10 billion yuan.
Nio plans further developments along with the Hefei government, Li added, but did not give further details.