Tencent-backed Chinese EV maker seeks US$1.8 Billion US IPO

[SINGAPORE] NIO Inc., the electric-car maker backed by technology giant Tencent Holdings Ltd., filed for a US$1.8 billion initial public offering, becoming the first Chinese automaker to seek a listing in the US as it gears up to compete against the likes of Tesla Inc.

The company applied to list its American depositary shares on the New York Stock Exchange under the symbol NIO, and the US$1.8 billion registration amount is a placeholder to calculate filing fees.

NIO and other Chinese electric-car makers are raising money to develop new products and fund an expansion as the world's biggest automobile market signals a shift to battery-powered vehicles in a bid to cut pollution and reduce dependence on imported oil. That technology drive has spawned a clutch of startups from China, all wanting to take on legacy carmakers and Tesla, whose owner Elon Musk is considering taking the company private.

The offering is being led by Morgan Stanley, Goldman Sachs Group Inc., JP Morgan Chase & Co., Bank of America Corp., Deutsche Bank AG, Citigroup Inc., Credit Suisse Group AG and UBS Group AG.

Tesla in China

The Chinese company's move to sell shares in the US comes at a time when Musk is busy setting up a gigafactory in Shanghai to tap a market where the government is promoting new-energy vehicles with incentives to buyers. The billionaire has said he plans to take the money-losing company private at US$420 a share, valuing Tesla at $82 billion.

NIO, founded by William Li and a group of other internet entrepreneurs, started selling its first vehicle, the ES8 SUV, in December, three years after the company was founded. The vehicle comes with a price tag of US$65,000 before incentives.

NIO, formerly known as NextEV, is among several startups to have sprouted in China after the introduction of incentives. In January, Byton, a Nanjing-based company started by former BMW AG executives, became the first Chinese automaker to hold a large-scale unveiling at the Consumer Electronics Show in Las Vegas. Others like WM Motor Technology Co. and XPeng Motors, backed by funding from Alibaba Group Holding Ltd., are also developing new models.

NIO's founder Li, also known as Li Bin, said he plans to transfer 50 million shares, accounting for about one-third of shares he owns in the company, to a trust at an "appropriate time in the future," he said in a letter in a filing to the US Securities and Exchange Commission. Li will retain voting rights to the stock while NIO users will discuss and propose how to use "economic benefits from these shares, through certain mechanisms to be implemented in the future," he said.

The EV maker counts Baillie Gifford & Co. and Hillhouse Capital among its investors. NIO is sufficiently funded for its operations and mass-production plans, Li said earlier this year.

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