Chinese electric car maker Nio files for US IPO

The pricing and number of shares to be offered has not been disclosed. According to a draft prospectus, the company will need to raise up to $1.8 billion to cover its operational expenses for the next three years, including a $650 million factory upgrade in Shanghai.

It is not clear if the company's existing investors will sell any shares in the offer. Principal backers include Tencent Holdings, which controls a 15.2% stake with about 132 million shares, and Hillhouse Capital, which has a 7.5% position with about 65.4 million.

Other significant investors include Baidu Capital, which contributed $100 million to a $600 million Series C round in March last year that went on to raise about $1 billion after being extended by a group including Everbright-IDG Industrial Fund, an M&A vehicle jointly launched by China Everbright and IDG Capital.

Hillhouse was among the earliest investors, providing $80 million alongside Shunwei Capital in 2015. Later the same year, Sequoia Capital China and Joy Capital invested $40 million. Other backers include TPG Capital, CITIC Capital Partners, GIC Private, and Warburg Pincus. The company has raised about $1.9 billion in total.

Formerly known as NextEV and also called "Weilai" in Chinese, Nio was established in 2014 by Bin Li, founder of Bitauto Holdings, and Xiang Li, founder of Autohome. It develops mid to high-end EVs, including autonomous cars and Formula E racecars, via manufacturing bases in China, the US, Germany, and the UK.

Nio began generating income this year with RMB46 million ($7 million) in revenue recorded for the six months to June, almost all of which was attributed to vehicle sales. The company incurred losses of RMB2.6 billion and RMB5 billion in 2016 and 2017, respectively. Losses came to RMB3.3 billion during the first half of 2018.

China is one of the largest markets globally for EVs and hybrid cars with several well-funded start-ups including CHJ Automotive, Baidu-backed WM Motor Technology, and IDG-backed Skio Matrix. Earlier this month, Xpeng Motors, an EV company focused on sport-utility vehicles, raised RMB4 billion from a number of private equity firms.

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• Topics
• Greater China
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• automobiles