Shares of Chinese electric carmaker NIO Inc fell as much as 15 per cent in their market debut, a day after its public offering was priced at the lower end of an expected range, weighed down by investor worries about the prospects of chief rival Tesla Inc.

NIO’s shares opened at $6 and dropped to a low of $5.35, giving the company a market capitalization of $5.52-billion.

The company, whose ES8 pure-electric, seven-seat sport-utility vehicle is seen as a rival to Tesla’s Model X, priced 160 million shares at $6.26 on Tuesday, just above the low end of its $6.25 to $8.25 target price range, raising $1-billion.

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Tesla’s struggles to meet its production targets and an abandoned attempt by Chief Executive Officer Elon Musk to take it private have weighed not just on its own stock, but also on peers looking to develop mass-market electric cars.

NIO, formerly known as NextEV and backed by Chinese tech heavyweight Tencent Holdings Ltd, is one of several largely Chinese-funded EV startups betting on the benefits of local production to compete with firms such as Tesla.

The listing - the third-biggest in the United States by a Chinese firm this year - comes as Chinese EV makers seek fresh capital to develop new products and finance investments in areas including autonomous driving and battery technologies.

Having begun promoting EVs in 2009, China aims to become a dominant global producer as it bids to curb vehicle emissions, boost energy security and promote high-tech industries.

Several EV makers such as WM Motor Technology Co and Xpeng Motor have also raised funds from heavyweight investors including tech giants Alibaba Group Holding Ltd, Baidu Inc and Tencent.

NIO, founded by Chinese entrepreneur William Li in 2014, incurred a net loss of $502.6 million in the first six months of 2018 on $6.95 million in revenue.

The company began customer deliveries of its ES8 in June and plans to launch a second, lower-priced electric sport-utility vehicle, the ES6, by the end of this year.

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Goldman Sachs, JPMorgan and Morgan Stanley led the IPO. Bank of America Merrill Lynch, Credit Suisse, Citigroup, Deutsche Bank and UBS were also part of the process.