Published: Fri, August 17, 2018
Finance | By Claude Patterson

Tencent-backed Chinese EV maker seeks US$1.8 Billion US IPO

Tencent-backed Chinese EV maker seeks US$1.8 Billion US IPO

NIO, the electric vehicle start-up backed by Tencent Holdings, is seeking to be the first Chinese carmaker to list in the USA, at a time when Elon Musk-led Tesla Inc.is seeking to go private.

The company applied to list its American depositary shares on the New York Stock Exchange under the symbol NIO, and the US$1.8 billion registration amount is a placeholder to calculate filing fees.

The new energy vehicle market is exploding in China as Beijing uses carrots and sticks to prod carmakers and consumers down the electric path.

Nio plans to launch its second volume manufactured electric vehicle, the ES6, by the end of 2018 and start initial deliveries in the first half of 2019. The new vehicle will be officially delivered in the first half of next year.

NIO said it had delivered 481 ES8s as of the end of July and had unfulfilled reservations for another 17,000, of which 4,989 were ordered with non-refundable deposits.

In the NYSE filing, Nio lauded its charging facilities, including a battery swap scheme, mobile charging truck service and pick-up and drop-off charging service.

Nio was founded in 2014 by entrepreneur William Li, originally as NextEV. Vehicle sales contributed to nearly all of the revenue. The company reported a loss of $758.8 million in 2017.

Last November, the company, whose investors also include Hillhouse Capital Group and Sequoia Capital, raised more than $1 billion in its latest fundraising round, led by existing investor Tencent, valuing the firm at about $5 billion.

Nio's chief development officer Padmasree Warrioris on the boards of directors of Microsoft and Spotify.

The company recognizes that issues could arise as it proceeds with self-driving technology.

"In March 2018, Tesla indicated that its autopilot system was engaged at the time of a fatal accident and an Uber Technologies Inc. self-driving vehicle struck a pedestrian leading to a fatality", Nio said in Monday's filing.

Nio also called out as a risk factor its reliance on manufacturing partners, such as Jianghuai Automobile Group Co., or JAC. -China trade war, the company said.

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