On October 5, NIO announced that it signed a strategic cooperation agreement with the company's strategic investor CYVN, announcing that it will establish an advanced technology research and development center in Abu Dhabi, U.A.E., and the two parties will jointly develop a new model for the local market. At the same time, NIO announced that it will officially launch its business in the Middle East and North Africa region, and the business operation will be carried out through NIO Middle East North Africa, a joint venture between NIO and CYVN. The U.A.E. will be the initial market for NIO in the Middle East and North Africa, and deliveries are scheduled to begin in the U.A.E. in the fourth quarter of this year.
According to public information, CYVN is an investment institution majority-owned by the Abu Dhabi government of the U.A.E., and its strategic investment focuses on the smart mobility industry. In fact, as early as last year, CYVN made two investments of $3.3 billion in NIO. It is understood that in June last year, NIO announced that it had signed a share subscription agreement with CYVN Holdings, an investment institution in Abu Dhabi, according to which CYVN Holdings will make a total strategic investment of about US$1.1 billion to NIO through private placement of new shares and transfer of old shares; In July of the same year, NIO announced the completion of a US$738.5 million strategic equity investment from CYVN Holdings, and in December of the same year, NIO announced that it had entered into a share subscription agreement with CYVN Holdings, an investment arm of Abu Dhabi, U.A.E., through its affiliate CYVN. According to the agreement, CYVN will invest a total of US$2.2 billion in cash and become the largest shareholder of NIO after the transaction is completed, but Li Bin, the founder, chairman and CEO of NIO, still owns 39% of NIO's super voting rights and is the company's largest voting shareholder.
With NIO's entry into the Middle East and North Africa markets, NIO's global layout will be further accelerated. At present, NIO has entered the market of 5 European countries in the whole system, including 6 production models including EL8, ET7, EL7, ET5, ET5T, and EL6. In the future, NIO also plans to introduce its second brand "ONVO" and the pure electric small car codenamed "Firefly" to Europe.
It is worth mentioning that although NIO began to lay out the European market as early as two years ago, the results achieved were not ideal. According to statistics, NIO will sell only 2,404 units in the European market in 2023. In addition, the impact of the European Commission's tariffs on Chinese imports of pure electric vehicles has also worsened NIO's sales in the European market. According to the data of the China Passenger Car Association, the performance of China's own brand pure electric vehicles in the EU has declined significantly in recent months. From January to August this year, EU sales were 8.11 million units, a year-on-year increase of 2%, but preliminary statistics showed that EU sales in August were only about 710,000 units, which was a serious downturn. Broken down into the field of pure electric vehicles, European brands such as Volkswagen, Tesla, Stellantis, BMW and Geely Volvo of Germany have relatively strong performance in this segment, while Chinese brands including SAIC, BYD, Xpeng and NIO have also performed well, but the overall scale of independent brands is relatively small.
Of course, compared to the Middle East market, the Middle East market has become one of the emerging markets for automakers looking for room for growth, especially for Chinese car brands, the Middle East market is still a blue ocean. In recent years, Chinese car companies including Changan, Xiaopeng, Great Wall, Chery and Nezha Automobile have begun to deploy in the Middle East or North Africa market.
Regarding this cooperation, Li Bin said: "We are optimistic about the development prospects of smart electric vehicles in the Middle East and North Africa markets. As an important strategic investor and partner of NIO, CYVN has abundant resources in the region, which will help NIO's business in the region continue to grow. The cooperation between NIO and CYVN will further promote the company's globalization and technological innovation strategy, accelerate NIO's globalization process, and bring innovative smart electric vehicle technologies and experiences to users in the Middle East and North Africa. ”
In addition, Li Bin posted on Weibo: "China has become the world's largest car exporter, the Middle East and North Africa market is an important strategic market for NIO, and Chinese brand smart electric vehicles are becoming more and more popular in the region."
As we all know, lower production costs are one of the advantages of China's electric vehicles choosing to go overseas, and now the export of China's own brands has become more and more advantageous, and the domestic automobile export volume has also grown rapidly in the past two years, and China's new energy vehicles have continued to strengthen their overseas efforts. Industry insiders said that more car companies will join the ranks of going overseas in the future, and more domestic cars will go global. As for whether NIO can sell more cars after going overseas, it may take some time. According to NIO's plan, by 2025, it will enter 25 countries and regions.
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