Cash-strapped electric vehicle maker Nio on Tuesday announced that it has reached an agreement with officials in the eastern Chinese city of Hefei, where the company’s joint manufacturing plant with JAC Motors is located.
Why it matters: The long-awaited funding deal is expected to provide relief for the Tesla challenger from a liquidity crisis, and allow for the launch of its third electric SUV model scheduled for delivery in September.
Details: Nio and the government of Hefei, the capital of eastern Anhui province, signed a framework agreement on Tuesday morning at a plant jointly owned by the company and JAC, according to an announcement released by the government on its official Weibo account (in Chinese).
- Nio has yet to reveal the details of the funding agreement, but the government expects the investment will exceed RMB 10 billion ($1.4 billion), making the company “an EV major” and enabling annual output of RMB 100 billion in revenue over the next five years.
- Nio will relocate its China headquarters to Hefei, including its research and development, sales and marketing, and manufacturing facilities, company president Qin Lihong confirmed on Tuesday in a WeChat Moments post.
- The Tencent-backed EV maker also kicked off mass production of its electric coupe SUV, the EC6, which will have a range of up to 615 kilometers (382 miles) with its new 100 kilowatt hour battery pack. The company unveiled the model for a yet undisclosed price range at its annual press event, Nio Day, in Shenzhen in December.
Context: Rumors of Nio capturing investment from different automakers have been circulating on Chinese media this year, including a reported up to $1 billion financing round from southern China’s biggest OEM, GAC.
- GAC, a Toyota and Honda partner, later denied the report saying the total amount of the funding will not exceed $150 million, and that it had not reached a binding agreement with the company.
- The EV maker is reportedly in talks with China’s auto giant Geely for an investment project totaling $300 million, according to a Chinese media report last week. The two companies have declined to comment.
- Anhui province is where the hometown of founder William Li is located. Li grew up on a farm in Anqing, a city neighboring Hefei, before leaving for Beijing for his undergraduate studies.