Chinese EV start-up Nio has announced that it has secured a US $1 billion (RMB 7 billion) investment from several state-owned companies in Hefei, China.
With the new investment, which the company has stated as a major milestone in its long-term growth, Nio will now be able to continue its business development including new products, technologies, distribution network and services. The investment has come from several companies that include Hefei City Construction and Investment Holding Group, Anhui Provincial Emerging Industry Investment Co. and CMG-SDIC Capital. There is a catch, however, for Nio with the investment.
Nio has to shift its base from Shanghai, where the company’s headquarters and other operations are based at, to Hefei. While Nio already has its factory in Hefei, which it operates in partnership with Anhui Jianghuai Automobile Group, it will now relocate its headquarters and operations including the R&D, sales, service, manufacturing and supply chain functions to Hefei Economic and Technological Development Area. The investment will be put into a new company called Nio China, where the investors will have a 24.1 per cent stake while Nio will retain 74.9 per cent.
Earlier this year, Nio announced that it will need new funding to continue operations through 2020. The company had also, reportedly, cut jobs and dropped the plan to construct a manufacturing facility in Shanghai.
Nio recently started production and customer deliveries of its flagship electric SUV, the new ES8, which had Tata Technologies working on it. The 2020 Nio ES8 is powered by a 100 kWh battery pack offering a range of up to 580 km (NEDC). Driven by two electric motors (a 160 kW permanent magnet motor and a 240 kW induction motor), the ES8 can go from 0 to 100 km/h in 4.9 seconds.
The new investment would also be used in the development and production of Nio’s first electric sedan that will be launched at the end of the year. To be based on the eT concept showcased Auto Shanghai 2019, the new sedan is expected to be powered by the same 100 kWh battery pack and here it is rumoured to help the car to a range of over 600 km per charge (NEDC).