A firm majority owned by the Abu Dhabi government, CYVN Holdings, will invest $738.5m in NIO Inc, the Chinese automaker announced this week.

The new investment will leave it with around 7% of NIO shares.

CYVN Holdings will be issued around 85 million new Class A shares at $8.72.

Closing is expected to take place in early July 2023. NIO and CYVN Holdings have also agreed to cooperate to “jointly pursue opportunities” in NIO’s international business, a statement said.

William Bin Li, founder, chairman and chief executive officer of NIO, said: “The strategic investments from CYVN Holdings demonstrate NIO’s unique values in the smart electric vehicle industry. The Investment Transaction will further strengthen our balance sheet to power our continuous endeavours in accelerating business growth, driving technological innovations and building long-term competitiveness.”

Jassem Al Zaabi, Chairman and Managing Director of CYVN Holdings, said: “Our strategic investments in NIO are driven by our appreciation of its leading brand, innovative and premium products, and proven technological capabilities in the smart electric vehicle market. We will join hands with NIO to drive the global energy transition and sustainable growth for the whole humanity.”

In its statement, NIO disclosed that CYVN has also entered into a deal with an affiliate of Tencent Holdings. Under this deal, some shares of NIO will be owned by Tencent.

The combined deals will leave CYVN with around 7% of NIO’s shares.