A Chinese state-owned fund based in Beijing has agreed to invest up to CNY10bn (US$1.45bn) in electric vehicle start-up Nio Inc, according to local reports citing company officials.
According to the reports, New York-listed Nio reached an agreement last week with Beijing E-Town Capital to establish a new company, Nio China, based in Beijing.
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The new funds will be used to support the company's R&D programme, help strengthen marketing efforts and build a new manufacturing facility in Beijing for Nio's next generation platform.
Currently, Nio is building its cars at a joint venture plant with JAC Motors in Anhui province, after it scrapped plans to build its own plant in Shanghai.
Nio founder William Li told reporters in a recent interview the company needs to invest significantly more in manufacturing capacity and generate significantly more sales for its business plan to work, noting that its partnership with GAC Motor only provides it with an annual capacity of 100,000 units.
Beijing E-Town Capital has identified new energy smart cars as one of four main industries it aims to promote. It has already invested in an electric vehicle joint venture between Daimler and BAIC Group and also BAIC Group's electric vehicle subsidiary BAIC-BJEV.
Nio reported a net loss of US$390m in the in the first quarter of 2019, a 70% increase from a year ago, on sales of just 3,989 cars.
