Chinese electric vehicle maker Nio closes 10 per cent up in New York IPO debut
Early investors hold onto their stakes in what is seen as a potential rival to Tesla
In one of the year’s largest Chinese public offerings in the US, Nio, an electric-vehicle maker backed by the Chinese technology giant Tencent, debuted on the New York Stock Exchange Wednesday and closed up nearly 10 per cent.
Nio stock opened below range at US$6 a share, and had a mixed reception on a day when the Dow Jones Industrial Average was flat. After dropping to a low of US$5.35, however, shares recovered to close up at US$6.58.
Nio raised US$1 billion and has a goal to turn profitable within three to four years.
Founded by Chinese entrepreneur William Li in 2014 and based in Shanghai, Nio is regarded as China’s answer to Tesla, with its ES8 pure-electric, seven-seat sport-utility vehicle being compared to Tesla’s Model X.
Like Tesla, Nio continues to report a loss, posting a net loss of US$502.6 million in the first six months of 2018 on revenue of US$6.95 million, according to the company. Nio which is still at the outset of production, has sold 2,100 vehicles so far.
“We are aiming to turn a profit within three to four years by focusing on the Chinese market before going global,” Nio Chief Financial Officer Louis Hsieh told the South China Morning Post on Wednesday. “China accounts for about 60 per cent of the electric vehicle market in the world.”