Pioneering Chinese EV maker NIO denied a fundraising report Monday that claims that the company is considering raising $3 billion from investors.
The report from Bloomberg stated, “NIO is considering raising around $3 billion from investors,” sourcing people familiar with the matter.
According to the sources, NIO approached investors in the Middle East, suggesting fundraising could happen within the next year.
NIO responded in a statement Monday, saying it “would like to clarify that the company currently has no reportable capital raising activity, other than the recent convertible notes offering that was completed on September 25, 2023.”
The company revealed Monday the closing of its $1 billion convertible senior notes offering proposed last week.
If anything changes, NIO said it will “promptly announce any material information” to comply with listing rules and requirements.
NIO fundraising to fuel EV expansion
The fundraising report comes after NIO received a $738.5 billion investment from CYVN Holdings, an investment firm backed by the Abu Dhabi government. NIO said it will use the funds to further strengthen its balance sheet to power its global expansion.
NIO’s second-quarter earnings indicated falling vehicle sales, margins, and revenue as it upgrades its lineup.
With the launch of the new ES6 in May and the new EC6 this month, NIO has now transitioned all eight models to its next-gen 2.0 platform. The EV maker also released the ET5 Touring, designed for Europe as its first electric station wagon.
The fundraising report comes as NIO’s losses are piling on and margins continue falling as it cut prices earlier this year to keep up with EV leaders like Tesla and BYD in the region.
NIO’s losses widened by 119% YOY to $835 million in Q2. Despite this, NIO believes its second-generation EVs will fuel growth in the second half of the year.
CEO William Li said, “Attributed to the product transition based on the NT2.0 Platform, coupled with the expansion of our power network and the strengthening of our sales capabilities, we expect a solid growth in vehicle deliveries in the second half of 2023.”
The results are already showing, with EV deliveries reaching 20,462 in July, up 103% YOY as it expands the brand.
On the company’s Q2 earnings call, Citi Analyst Jeff Chung asked about NIO’s refinancing plan and future cash flow. The senior VP of finance, Stanley Qu, responded, “I think as the delivery volume ramp-up from Q3 this year, our operating cash flow will be significantly improved.”
NIO aims to deliver between 55,000 and 57,000 EVs (+74%-80% YOY growth) between July and September as it looks to hit its 250,000 annual target.
NIO’s stock was trading down over 5% following the report but has since rebounded throughout the day following the company’s response. Meanwhile, NIO’s stock is still down over 50% from last year and over 86% from its peak in January 2021.
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