Chinese electric carmaker NIO to start trading today
Sep 12, 2018 (China Knowledge) - Chinese electric vehicle start-up NIO has priced its shares at USD 6.26 apiece at its U.S. initial public offering (IPO). The price which is at the bottom of its targeted price range of between USD 6.25 – USD 8.25 values the firm at USD 6.41 billion.
The company which is backed by Chinese tech colossal Tencent Holdings Ltd has raised about USD 1 billion in this initial offering.
NIO had initially hoped for a valuation of up to USD 20 billion, however escalating trade tensions and tariffs put between U.S. and China has dampened markets. Part of its lower valuation has also come amidst growing concerns regarding its main competitor Tesla’s inability to meet production targets which spread through other companies in the segment.
As reported by China knowledge previously, the financial filed reveals it had a net loss of USD 502 million on less than USD 7 million in revenue in the first half of 2018. Last year net losses were USD 758.8 million, with no recorded sales figures.
The valuation of NIO is largely based on the expected growth of the Chinese electric vehicle market. China targets to have 7 million new-energy vehicles sold by 2025 and have put in place several policies to that end.
While NIO itself has not received an Electric Vehicle manufacturing license from authorities, it aims to receive on within the next 2 to 3 years and has set aside a quarter of its IPO earnings to develop its own production facilities and supply chain. It is currently relying on Jianghuai Automobile Group, a medium-sized state company in Anhui to build its cars.
NIO shares start today on the New York Stock Exchange under the symbol “NIO.”
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