Chinese EV manufacturer NIO files for US IPO

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NIO VP of User Development Izzy Zhu at TechCrunch Shanghai 2017

In the latest IPO news, Chinese electric vehicle manufacturer NIO has filed to list on the New York Stock Exchange. The company hopes to raise up to $1.8 billion.

The company issued its filing to the US Securities and Exchange Commission on August 13. The IPO is being underwritten by JP Morgan, Morgan Stanley, and Goldman Sachs, among others. According to previous reports, NIO had plans to file for a US-based listing in September, with the company refusing to comment at that time.

A successful IPO could boost the company’s valuation to around $37 billion, according to previous estimates.

NIO first started generating revenue this year, reporting $6.7 million from vehicle sales and $7 million in total revenue. The company made losses of $759 million in 2017 and more than $500 million in the first six months of 2018. “We have negative cash flows from operation, have only recently started to generate revenues and have not been profitable, all of which may continue in the future,” the company warned in its filing.

NIO began making deliveries of its first batch of ES8 electric cars in June 2018 and is expected to add a second model to its portfolio in 2019. The company plans to launch new models every year in the future.

As of July 31, NIO had delivered just 481 ES8s, with unfulfilled reservations for a further 17,000. Nonetheless, approximately 12,000 of these were made up of orders for which a refundable deposit of RMB 5,000 ($726) had been paid.

Before filing, the company had received a total of $2.1 billion in investment from Tencent, Baidu, Sequoia Capital, and Joy Capital.

The company’s ES8 is touted to be a direct competitor to Tesla’s Model X, which retails in China for around RMB 900,000 compared to the ES8’s price tag of RMB 500,000. Despite the lower cost, NIO lacks the brand name and tested performance behind its US competitor. The company acknowledged this shortcoming in its filing, saying as a new entrant to the industry the company faces significant challenges.