February 21, 2024

Chinese electric vehicle maker Nio just got a $2.2 billion funding boost from Abu Dhabi–based CYVN, even as its stock struggles to breach the $10 mark.

CYVN, which pumped more than $1 billion into Nio back in July, bought 294 million shares at $7.50 each this time, Nio said in a statement. The latest infusion brings the Abu Dhabi investment vehicle’s stake in the EV manufacturer above 20%.

The war-chest top-up comes as Nio is “debating” a US entry by 2025, considering “any kind of partnerships” to do so, according to Ganesh Iyer, CEO of Nio USA.

Nio’s advantage

Founded in 2014—more than a decade after Tesla—Nio calls itself a “pioneer” because of its unique battery-swapping technology, which lets drivers switch batteries in minutes instead of using traditional charging stations.

Like most other EV makers, Nio has struggled amid supply chain disruptions, stiff competition, and Tesla’s price wars. But it’s also announced new models, grown its battery station footprint throughout Europe, and even launched a smartphone with 30 car-specific features that include parking and unlocking. Although its sights are set on luxury buyers, Nio is also debuting a second brand for the mass market next year.

“The bargaining power of suppliers, typically low due to high competitiveness in the sector, is further controlled by NIO’s strategy of vertical integration, strategic alliances, and raw material control,” three researchers from the University of Cartagena, Colombia, wrote in a study published this September. Also, even though its workforce is less than a quarter the size of Tesla’s, Nio has “a comparable number of patents” and “already possesses a number of charging [stations] that amount to one-third of Tesla’s owned ones,” they added.

Charted: Nio’s sinking stock soars a little

Nio’s EV business, by the digits

30,000 yuan ($4,200): Nio’s June price cut for all models, announced after months of resisting the pressure from a price war sparked by Elon Musk’s Tesla

4.6 billion yuan ($625 million): Nio’s loss for the three months ended Sept. 30, 25% less than the previous quarter but still a wide pit. “To consider investing, I would want to see the business turn a net profit (not just an operating profit) and prove that it can do so consistently,” market analyst Christopher Ruane writes. “It does not look anywhere near that now. So, although it could soar again in future, for now at least I have no plans to purchase NIO stock”

$12,000: Loss Nio is taking for every vehicle it sells, according to co-founder and president Lihong Qin, who said the company has “not become profitable yet”

10%: Share of staff Nio cut last month due to “fierce competition,” as per CEO William Li

60%: Year-over-year increase in Nio’s car deliveries for October, when they topped 16,000. A closer look reveals something less impressive, though. October deliveries only climbed 2.77% month-over-month, well below rivals’ growth

2%: Nio’s market share in China, where it lags US rival Tesla (6%) and homegrown behemoth BYD (35%) by many miles

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