NIO raises $1 billion in US IPO to ramp up production of electric vehicles

NIO, one of the biggest electric vehicle startups, officially entered the US stock market with a $1 billion IPO to ramp production of its electric vehicles.

It becomes the first Chinese-backed electric vehicle startup to go public in the US.

As we previously reported, NIO is presenting itself as a global EV company, but it is very much based in China. Most of its operations are in China right now and it’s the only market where its first vehicle is available: the NIO ES8, an all-electric SUV.

Last year, NIO claimed to have raised ‘up to $600 million’ in its latest financing round led by Baidu.

It added to the over $1 billion that the relatively young company claimed to have raised over the past few years, including significant investments from Chinese giant Tencent, which has also invested in Tesla.

But now the company is quickly running out of money.

According to their S1 filing to go public, they have lost over $700 million last year and they have already lost over $500 million this year.

Last month, we reported that the company was attempting to raise $1.3 billion through a US IPO.

Today, the company officially started trading on the NYSE and it confirmed that it actually raised a lot less than it first aimed to:

“NIO Inc., a pioneer in China’s premium electric vehicle market, today announced the pricing of its initial public offering of 160,000,000 American depositary shares (ADSs) at a price to the public of US$6.26 per ADS for a total offering size of approximately US$1.0 billion, assuming the underwriters do not exercise their option to purchase additional ADSs.”

They plan to use the money to ramp up production of their electric vehicles and expand their EV infrastructure.

NIO is putting a lot of emphasis on EV infrastructure and operating their own service centers and charging networks.

We recently reported on NIO’s ambitious infrastructure plans, which includes things like mobile charging stations inside electric vans, several electric car service centers, and battery swap stations.

To date, the company has produced about 2,000 NIO ES8 all-electric SUVs.

The first 10,000 ES8 vehicles are the “Founder Edition” with a starting price of RMB 548,000 (~$83,000 USD) before incentives.

NIO says that it already pre-sold all of them.

The standard ES8 starts at RMB 448,000 (~$68,000 USD) or RMB 375,400 ($57,000) after govt. incentives, which represents roughly half of the price of the Tesla Model X in China.

But NIO also offers a battery renting structure, similar to Renault’s ZOE battery scheme, which lowers the upfront price of the vehicle to RMB 275,400 (~$42,000 USD).

The battery renting fee is not cheap at RMB 1,280 (~$200 USD) per month, but it also gives owner access to a battery swap system to get more range quickly.

NIO also plans to use the funds to launch its second electric vehicle, a smaller and cheaper SUV.