“Tesla-fighter” in China Seeks to Raise $1.8 Billion in New York

By Joyce Yu

Philadelphia, PA–As Elon Musk seeks to take Tesla private, Chinese electric vehicle start-up NIO is eyeing to going public in the United States, expecting to raise $1.8 billion initial public offering of its American depositary shares.

Dubbed a “Tesla-fighter” in China, NIO was founded in 2014, and has attracted some deep-pocketed investors, including Chinese tech companies Tencent, Baidu, and US venture capital firm Sequoia Capital. Hoping to eventually expand sales beyond China, including to the United States, NIO has offices around the globe, including in California, London and Munich. Going listed in New York will help NIO to position itself as a company with global ambitions. The firm didn’t provide a time frame for the proposed IPO in its filing.

NIO is just one of a number of electric vehicle makers in China, the world’s biggest market for electric vehicles. These local manufacturers are able to compete with foreigner players on price. For instance, NIO’s ES8 electric SUV, which was unveiled last year, sells for about $65,000, or about half the current price of the most basic version of Tesla’s Model X SUV in China. NIO said that the ES8 also offers customers some Tesla-esque features and perks, including an in-car artificial intelligence system and a charging portal that it says will let drivers change their car batteries in just three minutes.

Despite growing competition from Chinese electric vehicle manufacturers, some analysts say it’s still too early to tell how they’re doing. Only starting to deliver its SUVs to customers in June, NIO has secured about 17,000 of the vehicles on order with customers. In the first half of 2018, it recorded just $7 million in sales and made a loss of $503 million. Mr Lihong Qin, NIO’s president once told CNN in an interview that NIO wants to “target the middle class in the big cities in China,” predicting that market will double in size in the next few years.

Several Chinese big names have successfully listed on Wall Street this year, even as Sino-U.S. trade tensions involving tit-for-tat tariffs rattle global stock markets. This includes the $1.63 billion float by online group discounter Pinduoduo Inc, and Chinese video streaming service provider iQiyi Inc which raised $2.42 billion from a Nasdaq IPO in March. Other Chinese car and electric vehicle makers that are listed in the United States include Great Wall Motor Co Ltd and Kandi Technologies Group. At $1.8 billion, NIO’s IPO is set to be the biggest U.S. listing by a Chinese automaker.