The "Middle Eastern tyrants" have made another move, spending tens of billions of yuan to invest in NIO.
On December 18, NIO announced that the company signed a new round of share subscription agreement with Abu Dhabi investment institution CYVN Holdings L.L.C (hereinafter referred to as "CYVN Holdings") through its subsidiary CYVN Investments RSC Ltd (hereinafter referred to as "CYVN"), under which CYVN will invest a total of US$2.2 billion (about RMB 15.7 billion) in cash to subscribe for 294 million new Class A ordinary shares of the company.
Affected by the above news, NIO rose more than 10% before the US stock market. Since the beginning of this year, many car companies such as Weilai, Leap, and Xpeng have received large investments from foreign companies, and the leading advantages of Chinese companies in the field of new energy vehicles are gradually turning into "real money", forming a "strong magnetic field" to attract foreign investment.
NIO continues to attract Middle Eastern capital
In July this year, NIO just received a strategic equity investment of US$738.5 million (about 5.27 billion yuan) from CYVN. In addition, CYVN also purchased US$350 million (about 2.497 billion yuan) worth of Class A ordinary shares of NIO from an affiliate of Tencent.
In December, CYVN invested another $2.2 billion in NIO. NIO said that the investment transaction in December was subject to customary closing conditions, and the delivery is expected to be completed in the last week of December. Following the completion of the investment in December, CYVN will hold 20.1% of NIO's total issued and outstanding shares.
Li Bin, Founder, Chairman and CEO of NIO, said, "We are deeply encouraged by CYVN's vision to accelerate the global transition to a more sustainable future, and thank CYVN for recognizing NIO's unique value. With the strengthening of its balance sheet, NIO is well positioned to strengthen its brand positioning, enhance its sales and service capabilities, and make long-term investments in core technologies to cope with the increasingly fierce competitive landscape, while (NIO will) continue to improve its execution efficiency and systematization capabilities. ”
Jassem Al Zaabi, Chairman and Managing Director of CYVN Holdings, said: "Our increased investment in NIO is in line with our strategy to continue to build a world-leading portfolio in the mobility sector. This investment demonstrates our confidence in NIO's unique positioning and competitiveness in the global smart electric vehicle industry." We are excited to be a long-term strategic partner of NIO and support its efforts in product innovation, technological breakthroughs and international market expansion." ”
Foreign capital has repeatedly invested in Chinese automakers
CYVN's partnership with NIO, based in Abu Dhabi, the capital of the United Arab Emirates, is just one example of a "Middle Eastern tycoon" investing in a Chinese automaker.
In June this year, Saudi Arabia's investment ministry signed an agreement worth 21 billion Saudi riyals (about 40 billion yuan) with Chinese electric vehicle maker Human Horizons to establish a joint venture to develop, manufacture and sell vehicles.
In addition to the "Middle East tycoons", established European car companies have also continued to increase their investment in Chinese car companies. On October 26, Stellantis N.V. (hereinafter referred to as "Stellantis Group") and Leapmotor both announced that they have officially reached a cooperation, and Stellantis Group plans to invest about 1.5 billion euros (about 11.68 billion yuan) to acquire about 20% of the equity of Leapmotor.
At the same time, Stellantis Group and Leapmotor will form a 51%:49% joint venture called Leapmotor International. With the exception of Greater China, the joint venture has exclusive rights to export and sell to all other markets around the world, as well as to manufacture Leapmotor products locally. According to Leapmotor's plan, Leapmotor's first global model, the C10, will enter the European market in the third quarter of 2024 as an export.
On July 26, Volkswagen announced plans to invest US$700 million (about 5 billion yuan) in Xpeng Motors. Volkswagen said that with the capital increase, it will eventually hold a 4.99% stake in Xpeng Motors. Volkswagen China's Chairman and CEO Brad said that the penetration rate of new energy vehicles in the Chinese market has exceeded 30%, and this figure is expected to reach 50% by 2025. The Volkswagen Group needs to quickly seize the huge potential of market growth and meet the expectations of Chinese customers for high-quality products.
On the whole, Chinese automakers are entering a new stage of "exchanging technology for the market". Ping An Securities Research Report said that the investment of foreign car companies in the new domestic car-making force is a milestone event in the history of the mainland automobile industry, China's automobile industry has evolved from the past "market for technology" to "technology for market", and Chinese car companies will also change from the past technology importer to technology exporter.
Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, said in an interview with reporters: "Thirty years in Hedong, thirty years in Hexi. China's passenger car market is self-made, Audi entered China in the last century, and FAW joint venture, we are the market for technology. Now, China is in a leading position in terms of industrial chain technology, vehicle manufacturing, market reputation and price competitiveness in the electric vehicle market, and has international competitiveness. ”
Chinese automobiles are going to overseas markets
Why is foreign capital optimistic about China's new energy vehicle companies? This is mainly due to the surge in China's new energy vehicle exports in recent years and the gradual entry into the world.
According to the China Association of Automobile Manufacturers, from January to November this year, the continent exported 4.412 million vehicles, a year-on-year increase of 58.4%. Passenger car exports totaled 3.72 million units, reflecting a 65.1% y/y increase.
Europe and the Middle East, which are favored by Chinese automakers, are the main regions for China's new energy vehicle exports. According to the S&P Global Vehicle Strategy & Pricing team in the report "Opportunities and Challenges in China's Automotive Overseas Boom", Western Europe, the Middle East, and ASEAN will become the main positions for Chinese automobiles to go overseas. By 2030, Chinese automakers will sell more than 800,000 units in Western Europe, and more than 400,000 units in the Middle East and ASEAN markets.
According to the research report of Ping An Securities, it is expected that by 2030, the export of mainland automobiles will exceed 10 million units, and the export prospects of mainland automobiles will be broad in the long run. For example, in October 2023, the European Union officially initiated a countervailing investigation against pure electric passenger vehicles originating in China in response to the threat of China's local NEV exports to Europe's local industrial chain. With the increase in automobile exports, setting up factories overseas may be a must for most car companies to deepen their efforts in overseas markets.
Dongguan Securities Research Report said that looking forward to 2024, as the domestic new energy vehicle industry enters a period of rapid growth and the automotive industry chain is becoming more and more perfect, superimposed independent brands in the three electric technology and intelligent driving and other related fields to gradually establish advantages, under the influence of multiple positives, the overseas influence of independent brands is gradually increasing, China's automobile exports will enter a large-scale growth cycle, optimistic about the export business ability of strong vehicle enterprises.
Editor-in-charge: Zhu Yumeng Proofreader: Gao Yuan
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