Chinese electric car maker Nio plans to issue 60m new American Depositary Shares (ADS) in a follow on offering from its September 2018 initial public offering (IPO) when its shares began trading on the New York Stock Exchange (NYSE).
Nio is looking to capitalise on a 15 fold increase in its share price this year to boost its coffers, joining a rush for fundraising among Chinese new energy vehicle (NEV) manufacturers as they look to increase their exposure to growing global demand for electric vehicles.
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Other Chinese NEV manufacturers that have successfully raised capital in the US in recent weeks include Xpeng and Li Auto while Tesla also plans to raise US$5bn in its third stock offering this year, according to reports.
Nio plans to issue 60m ADS with the option of selling a further 9m, according to reports citing a company statement. Based on its current share price of US$41, the company could raise US$2.8bn from the secondary share offering. Its share price fell on the news, from a peak of US$49 in November, but remains far higher than the low of US$2.40 in March.
NEV sales have increased sharply in China and Europe in recent months, driven by government incentives. Sales in China doubled to 200,000 units in November and were up by almost 4% at 1.1m units in the first 11 months of 2020 despite the COVID-19 pandemic.
Nio sales also more than doubled year on year to 5,291 units in November and were up by 111% at 36,721 units year to date.
