Nio plans stock sale worth US$3.12 billion as Chinese electric carmakers boost capital to challenge Tesla

Nio will price 60 million American depositary shares after close of US trading on Friday, with option to raise the size to 69 million

Stock placement, worth US$3.12 billion at current market price, could overtake recent add-on offerings by rivals Xpeng and Li Auto

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Nio makes most of its time in the sun among investors. Photo: Bloomberg

Published: 12:23pm, 11 Dec 2020Updated: 10:04pm, 11 Dec 2020

Nio is seeking to bolster its capital by selling more shares in the US, joining a rush of post-listing offerings by Chinese electric vehicle makers seeking to challenge industry leader Tesla.

The Shanghai-based firm plans to sell 60 million new American depositary shares (ADSs), with an option to increase it to 69 million if demand from investors is strong, according to its New York Stock Exchange filing late Thursday. It has mandated Morgan Stanley and China International Capital Corp to arrange the sale.

Nio will price the share sale after the US market closes on Friday. Based on Nio’s last-traded price of US$45.22 on Thursday, the add-on offering will raise as much as US$3.12 billion, though such offerings are typically priced at a discount to entice investors. Each ADS represents one Class A ordinary share.

The refinancing is the latest sign that Chinese new-energy vehicle (NEV) makers are stepping up the development of new smarter and premium cars as they compete with Elon Musk’s Tesla on their home turf, the world’s largest market for such vehicles.

Employees install batteries onto an electric sport utility vehicle at Nio’s production facility in Hefei, Anhui province, China. Photo: Bloomberg

Nio’s share sale follows the US$5 billion sale of common stock by market leader Palo Alto, California-based Tesla on Tuesday. Xpeng Motors said on Wednesday that it could raise up to US$2.48 billion by selling as many as 55.2 million ADSs, while Li Auto last week said it would raise as much as US$1.6 billion by issuing 47 million ADSs.