GAC Nio, a joint venture (JV) between Chinese automaker GAC and the electric vehicle startup, is reportedly seeking RMB 1.5 billion ($216 million) in a fresh round of funding to support expansion initiatives including opening flagship stores and clubhouses across the country.

Why it matters: Signals that GAC Nio is seeking funds externally may mean that interest from its namesake investors is flagging. With it, the possibility of further collaboration between the two companies is vanishing, and hope from some of Nio’s investors that the EV maker could be rescued by GAC is also disappearing.

  • GAC Nio’s first EV model may compete with GAC’s premium EV, Aion LX, launched last year. It bears striking resemblance to the GAC SUV and is similarly priced.
  • GAC and Nio set up the JV with registered capital of RMB 500 million (around $72.2 million) in April 2018. Both companies hold 45% share, and the remaining 10% has been reserved as employee incentive compensation.

Details: GAC Nio is seeking to raise around RMB 1.5 billion to finance growth with a pre-money valuation of the same amount, according to a Chinese media report.

  • It reportedly plans to increase investment in product development, user community, and sales network expansion.
  • The company is about to close the financing, according to a company spokeswoman, who declined to give further details.
  • The EV maker last month unveiled its first mass production model, the Hycan 007, a five-seat SUV with an estimated 643 kilometers (400 miles) of range.
  • Delivery has been scheduled for April this year with a conservative annual target of 15,000 units, Liao Bing, the founder and CEO, said.
  • Similar to Nio, the company is using a direct sales model featuring self-owned showrooms, called Hycan Park. GAC and Nio will provide delivery services.
  • It is also using word-of-mouth to market the cars, and has formed an online community in its app.
  • GAC Nio is also planning to use clubhouse-style stores, called Hycan Pop, as part of the user community strategy. Potential partners include community centers, kids clubs, and inns, the company said at a press conference.

Context: With a price range between RMB 200,000 and RMB 300,000 (around $28,900 to $43,300), Hycan is positioned to appeal to the expanding, middle-class market, complementing Nio’s high-end offerings, Nio president Qin Lihong told media during its annual launch event in Shenzhen last month.

  • Nio last month reported a robust 35% quarter-on-quarter growth, delivering 4,799 vehicles for the third quarter, followed by a 71% sequential surge in the fourth quarter.
  • GAC also posted a 110% annual growth selling around 42,200 electric vehicles in 2019. Southern China’s biggest automaker began delivering its first all-electric model, the GE3, in late 2017.

Nio, GAC joint venture unveils first EV model

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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