Chinese electric vehicle start-up NIO Inc. officially entered the U.S. stock market with a US$1 billion initial public offering (IPO), becoming the first Chinese electric vehicle firm to go public in America.
NIO announced the pricing of its IPO of 160 million American depositary shares (ADSs) at a price to the public of US$6.26 per ADS for a total offering size of approximately US$1.0 billion, assuming the underwriters do not exercise their option to purchase additional ADSs. NIO’s stock price is near the low end of its projected price range of US$6.25 to US$8.25, valuing the firm at US$6.41 billion.
The company plans to use about a quarter of its net proceeds from this offering to help develop production facilities and supply chain, said company’s prospectus filed in early August.
Founded in 2014, the company has secured four financing rounds with a total of US$2.4 billion raised in the past four years. The major investors include Sequoia Capital China, Tencent, Baidu, Temasek Holdings and Joy Capital. The company completed its latest US$1.1 billion series D financing round led by Tencent in November 2017.
Shanghai-based NIO is backed by Chinese internet giants including Baidu, Inc. and Tencent Holdings Limited, as well as Chinese smartphone maker Xiaomi Corporation. Tencent also owns a small stake in Tesla stock.
The company is targeting at the premium electric-sport utility vehicle (SUV) segment, with its first electric SUV — the seven-seat ES8 — launched in December 2017.
The company claims the NIO ES8 has similar performances as Tesla’s, but at half the sticker price. That will need to be tested by future drivers as the company strives to increase delivery.
The ES8 sells at a base price of RMB448,000 (US$66,000), while Tesla’s Model X has a base price of about RMB920,000 (US$134,357) in China.
The company’s shares are trading on the New York Stock Exchange under the symbol NIO.