Middle East capital continues to "heavy" China's new energy vehicles NIO has received another $2.2 billion strategic investment from Abu Dhabi investment institutions

Reporter Xia Zhibin and Quartz Jing reported from Shanghai

(NIO's show car at the 2023 Guangzhou Auto Show.) Xia Zhibin/Photography)

The battery swap alliance continues to grow, answering 140 media questions in more than two hours, and live streaming the 150kWh ultra-large endurance battery pack...... Li Bin, founder, chairman and CEO of NIO, can be called one of the busiest heads of new car-making forces in recent days.

NIO also ushered in good news again. On December 18, NIO announced that it has signed a new round of share subscription agreement with CYVN Holdings (hereinafter referred to as "CYVN"), an Abu Dhabi investment institution. According to the agreement, CYVN, through its subsidiary CYVN Investments, will make a total strategic investment of approximately US$2.2 billion (approximately RMB 15.7 billion) in the form of cash to NIO.

The reporter of "China Business Daily" noted that this is the second time that NIO has received strategic investment from CYVN this year. Li Bin posted on NIO's official app: "This investment will support NIO's technological innovation and business development. We look forward to working with CYVN to continue to promote product innovation, technological breakthroughs and international market expansion, and jointly contribute to global sustainable development." ”

In the environment of increasingly fierce market competition, it has once again received a large investment from Middle Eastern capital, which is bound to provide a boost to NIO's long-term development. While gaining the favor of Middle Eastern capital, NIO's other operating indicators have also entered a period of positive development.

"With the strengthening of its balance sheet, NIO is well positioned to respond to the increasingly fierce competitive landscape, strengthening its brand positioning, enhancing its sales and service capabilities, and investing in core technologies for a long time, while continuing to improve its execution efficiency and systematization capabilities. "We firmly believe that NIO will further consolidate its leading position in the transformation of the global automotive industry." ”

NIO is also increasing its layout. In the live broadcast of the measured 150kWh ultra-large endurance battery pack, Li Bin announced that he would release the executive flagship sedan ET9 at this year's NIO Day. According to Li Bin, ET9 is a technology flagship that represents the world's top technology.

Re-investment from Middle East Capital

In recent years, China's new energy vehicles have always maintained a rapid growth trend. According to data from the China Association of Automobile Manufacturers, in January ~ November this year, the production and sales of new energy vehicles in mainland China totaled 8.426 million and 8.304 million, an increase of 34.5% and 36.7% year-on-year respectively, and the market share reached 30.8%. Especially in November, the monthly production and sales of new energy vehicles in China exceeded one million units for the first time, with production and sales of 1.074 million units and 1.026 million units respectively, an increase of 39.2% and 30% year-on-year respectively, and a market share of 34.5%.

The rapid development of China's new energy vehicle industry and the rapid rise of the global automotive industry have also attracted more and more overseas capital. Especially this year, Middle Eastern capital has accelerated its entry into China and has reached cooperation with a number of new energy industry chain companies.

NIO is one of the representative companies in cooperation with Middle East capital. In July this year, NIO has 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 Holdings Limited.

The reporter learned that CYVN is an investment institution headquartered in Abu Dhabi, focusing on strategic investment and layout in the field of advanced, intelligent and sustainable mobility, and is committed to cooperating with industry leaders in this field around the world.

In less than half a year, CYVN chose to invest in NIO again. According to the announcement issued by NIO, CYVN will subscribe for 294 million new Class A ordinary shares of the company. It is reported that the closing of the deal is expected to be finalized in the last week of December.

According to the announcement, after the completion of the above investment transaction, CYVN's shareholding in NIO will increase to about 20.1%. In addition, CYVN will have the right to nominate two directors to NIO's board of directors if it holds at least 15% of the shares at the time of the closing of the investment transaction in December. If the shareholding is higher than 5% but less than 15%, CYVN has the right to nominate a director to NIO's board of directors.

It is worth mentioning that in terms of equity, Li Bin is still the shareholder with the single largest voting right and has control over the company. Li Bin said: "CYVN's increase in NIO fully reflects the recognition of NIO's products, technologies, services and user community by long-term investors. "After the completion of this investment, NIO and CYVN will continue to carry out strategic and technical cooperation in the international market.

Jassem Al Zaabi, Chairman and Managing Director of CYVN, said: "Increasing our strategic investment in NIO is in line with our strategy 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 pleased to be a long-term strategic partner of NIO and support its unremitting efforts in product innovation, technological breakthroughs and international market expansion." ”

The business has entered the harvest period

In addition to gaining the favor of capital again, NIO's other businesses have also entered a period of fruitful harvest. On November 29, NIO and Geely Holding signed a strategic cooperation agreement on battery swapping, under which the two parties will work together to build two battery swap standard systems of "private cars" and "commercial vehicles" through the model of "co-investment, co-construction, sharing, and co-operation", accelerate the connectivity and coordination of the vehicle, station, battery, and operation ends, expand the scale of the battery swap network, and provide more convenient, safer, and more complete services for users with different needs.

Before signing a strategic cooperation agreement with Geely Holdings, NIO also signed a contract with Changan Automobile to carry out battery swap business cooperation. Regarding the opening up of the battery swap business, Li Bin said that the battery swap is the moat of NIO. "With the increase in peers joining the battery swap network, as their cars gradually come to market, as their cars sell more and more, our moat will only get deeper and deeper. ”

According to the data, as of December 6, NIO has added 895 new battery swap stations this year. It is reported that NIO users have exchanged more than 33 million times, with an average of 60,000 battery swaps per day, and an average of one car departs from the battery swap station every 1.44 seconds.

In addition to the growing battery swap alliance, NIO has also obtained the qualification to build cars. According to the credit information management system of vehicle manufacturers of the Ministry of Industry and Information Technology, the name of the enterprise is Weilai Automobile Technology (Anhui) Co., Ltd., the legal representative is Qin Lihong, and the catalog serial number is 214, which is also the catalog serial number in the details of the model declared by the enterprise in the "Road Motor Vehicle Manufacturers and Products".

According to the financial report data, NIO's revenue in the third quarter of 2023 was 19.07 billion yuan, an increase of 117.4% quarter-on-quarter and 46.6% year-on-year, a record high, the gross profit margin of the vehicle was 11.0%, a significant increase from the previous quarter, the cash reserve was 45.2 billion yuan, an increase of 13.7 billion yuan from the previous quarter, the net loss was 4.5567 billion yuan, a decrease of 24.8% from the previous quarter, and the R&D expenditure was 3.04 billion yuan, exceeding 3 billion yuan for four consecutive quarters.

NIO has also carried out multi-dimensional cost reduction and efficiency improvement, including merging departments and positions that have been redundant, reforming inefficient internal work processes and division of labor, eliminating inefficient positions, and postponing and reducing project investment that cannot improve the company's financial performance within three years.

Guosheng Securities research report pointed out that looking ahead, if it can achieve complete self-production, the overall manufacturing cost of NIO is expected to drop by 10%, which can improve profitability to a large extent. In addition, the company plans to postpone or cancel some projects that cannot improve the company's financial performance within three years, such as the original planned self-developed self-developed battery project at this stage to be modified to independent research and development of battery cells and battery packs, and entrusted to third-party manufacturing. "Taking into account cost reduction and efficiency improvement, postponement or suspension of some projects, organizational consolidation and streamlining, NIO is expected to save 2 billion yuan in investment next year. ”

(Editor: Quartz Jing Proofreader: Zhai Jun)