SoftBank Pulls Plug on Plans to Invest in Chinese Tesla Rival – The Wall Street Journal
What happened: SoftBank has decided not to invest in the initial public offering of Chinese electric-vehicle maker NIO after months of talks over a possible investment. The report didn’t specify for the reasons why the Japanese tech giant walked away from the investment.
Why it’s important: Electric cars are more expensive than their oil-fueled counterparts and making electric vehicles is even more costly. NIO is among a horde of Chinese EV companies who are seeking capital to fund aggressive research and development efforts as the industry rapidly expands. The company filed for a $1.8 billion US IPO on August 14, but the move raises concerns about its early IPO. Local media expressed concerns whether the amount would be enough to cover NIO’s spending. The company further lowered its IPO goal to $1.51 billion on August 28.