Chinese electric vehicle startup NIO announced that it entered into definitive agreements for investments in NIO China, a new entity controlled by NIO Inc., with a group of investors.
The investors (collectively, the “Strategic 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.
Under the definitive agreements, the Strategic Investors will invest an aggregate of RMB7 billion (about €911 million or $989 million) in cash into NIO Holding Ltd., the legal entity of NIO China.
In a statement, NIO said it will inject its core businesses and assets in China, which are valued at RMB17.77 billion, into Nio China and invest RMB4.16 billion it. Assets outside China, such as research and development centers, aren’t included in NIO China, the company said.
Upon the completion of the investments, NIO will hold 75.9% of controlling equity interests in NIO China, and the Strategic Investors will collectively hold the remaining 24.1%.
NIO China will establish its headquarters in the Hefei Economic and Technological Development Area (HETA), where the Company’s main manufacturing hub is located, for its business operation, research and development, sales and services, supply chain and manufacturing functions. NIO will collaborate with the Strategic Investors and HETA to develop NIO China’s business and to support the accelerated development of the smart electric vehicle sectors in Hefei in the future.
NIO delivered 3,838 vehicles in the first three months of this year, and sales and production were recovering in March compared to February.
The investment is another important milestone of NIO for its long-term growth. After receiving the investments from the Strategic Investors, NIO will have more sufficient funds to support its business development, to enhance its leadership in the products and technologies of smart electric vehicles and to offer services exceeding users’ expectation. Additionally, the Company believes the launch of NIO China headquarters in Hefei enables NIO to improve its operational efficiency and to sustain its growth and competitiveness in the long run.