China’s NIO (NIO) just received a $470 million cash investment as it prepares for its next growth stage. With the new funding and the launch of its low-cost Onvo brand, NIO is laying the groundwork to accelerate sales.
NIO gets significant cash injection to propel EV growth
NIO China, the subsidiary of NIO, announced the new cash investment on Sunday. The EV maker is receiving a total of RMB 3.3 billion ($470 million) in funding from three investors.
The statement said that Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment Co, and GS Capital will invest nearly half a billion in NIO China for newly issued shares.
The cash investment will be deployed in two installments. About 70% will be invested by the end of November 2024, while the remaining 30% will be made by the end of December 2024.
With an “enhanced balance sheet,” NIO said it’s “strategically positioned” with long-term advantages in tech, products, services, and its user community.
Following the transaction, NIO will hold 88.3% of NIO China shares, down from 92.1% currently.
In addition, NIO’s parent company has the right to invest an additional RMB 20 billion ($2.9 billion) in NIO China by December 31, 2025.
NIO stock is on the rise
NIO will use the new cash investment to support its new multi-brand strategy, expand into new markets, and propel it into its next stage of sustained growth.
The L60 electric SUV, the first vehicle under NIO’s new low-cost Onvo brand, launched earlier this month.
Starting at just $21,200 (249,900 yuan), the L60 is widely expected to be a true rival to Tesla’s top-selling Model Y.
Since launching the Onvo L60, NIO’s stock has surged over 70% in the past month. However, share prices are still down 17% in 2024 and over 85% from their all-time high of over $62 per share in February 2021. Following the news, NIO’s stock is trading at just under $7 per share.
NIO has received several upgrades and praise following the launch of its new electric SUV. Deutsche Bank analyst Wang Bin’s team said in a note to investors last week that the L60 paves the way for a “brand revival.”
Bin’s team claimed initial dealer feedback has been “very strong.” As a result, they are increasing monthly delivery guidance to 10,000 from 8,000.
| NIO Onvo L60 vs Tesla Model Y trims | Range (CLTC) | Starting Price |
| NIO Onvo L60 (Battery rental) | 555 km (341 mi) 730 km (454 mi) | 149,900 yuan ($21,200) |
| NIO Onvo L60 (60 kWh) | 555 km (341 mi) | 206,900 yuan ($29,300) |
| NIO Onvo L60 (85 kWh) | 730 km (454 mi) | 235,900 yuan ($33,400) |
| NIO Onvo L60 (150 kWh) | +1,000 km (+621 mi) | TBD |
| Tesla Model Y RWD | 554 km (344 mi) | 249,900 yuan ($34,600) |
| Tesla Model Y AWD Long Range | 688 km (427 mi) | 290,900 yuan ($40,300) |
| Tesla Model Y AWD Performance | 615 km (382 mi) | 354,900 yuan ($49,100) |
In a new research note sent to investors on Sunday (via CnEVPost), the team said the new funding “reduces some investor concerns on the immediate share dilution” in NIO stock. Bin’s team expects NIO share price to “react positively” following the new cash injection.
After delivering another 20,176 vehicles last month, NIO has crossed the 20,000 sales mark for four consecutive months as it builds momentum.
Update 10/1/24: NIO delivered 832 Onvo L60 models in just three days as September sales crossed the 20,000 mark for the fifth straight month (See more on NIO’s September and Q3 deliveries here).
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