China's Nio Secures $2.2 Billion Investment from Abu Dhabi-Backed Fund

On Monday (18/12), the renowned Chinese electric vehicle (EV) manufacturer, Nio, announced a strategic financial boost of $2.2 billion from an Abu Dhabi-supported fund.

This move comes as Nio gears up to face escalating competition in the EV market.

Under the terms of the agreement, CYVN Holdings is set to procure 294 million fresh shares from Nio at a price of $7.50 per share, with the transaction expected to conclude by month-end.

This acquisition will elevate CYVN's stake in Nio to approximately 20.1%.

Notably, CYVN had previously made a significant investment of $738.5 million in Nio this past July, also acquiring shares from a Tencent Holdings affiliate, culminating in a cumulative ownership of about 7%.

Following the upcoming financial transaction, CYVN will possess the authority to nominate two individuals to Nio's board of directors, signifying a deepening collaboration between the two entities, particularly in global markets.

The Chinese EV landscape is witnessing rapid expansion, with sales projections indicating a surge of nearly 40% in new energy vehicles, including exports, amounting to 9.4 million units this year.

This uptick is expected to represent over 30% of all new vehicle sales in the country.

However, this growth trajectory also intensifies competition, as emerging startups and non-automotive industry players are entering the arena.

Despite its market presence, Nio has faced financial challenges, recording a net deficit of 14.5 billion yuan (equivalent to $2.03 billion) in 2022.

In response, Nio recently revealed plans to reduce its workforce by 10%.

In parallel developments within the Chinese EV sector, other manufacturers are also forging international ties.

Notable collaborations include Zhejiang Leapmotor Technology securing investments from Stellantis and Xpeng partnering with the Volkswagen Group.

Source: Nikkei Asia