Tesla challenger NIO in talks with carmaker GAC Group for new funding worth US$150 million
- NIO warned in December that it did not have adequate cash for continuous operation in the next 12 months
Chinese carmaker Guangzhou Automobile Group Co (GAC Group) said on Thursday that it was in early talks with Tesla challenger NIO about a financing proposal, but any potential investment would not exceed US$150 million.
US-listed NIO, which last month flagged an urgent need for more funding, said on Wednesday it was exploring financing and strategic opportunities with GAC Group.
NIO did not specify the size of the potential funding, but earlier in the day Sina Finance and other media reported it was in talks for up to US$1 billion, sending its shares up as much as 17 per cent in heavy trade.
GAC Group said in a statement that the potential financing of up to US$150 million would include funds it would raise itself and not have a material impact on its own finances.
It also said that there is “still great uncertainty as to whether an agreement can be reached”. Shares in Hong Kong-traded GAC Group fell more than 1 per cent in morning trade.
NIO declined to comment on the statement from GAC Group.