Skip to main content

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.

Story continues below advertisement

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.

Story continues below advertisement

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.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter