SHANGHAI – NIO said in a statement on January 15 that it is in preliminary talks with partner GAC Group, confirming media speculation that China’s fifth largest automaker would invest in the country’s leading Chinese smart EV startup.
“In view of the unusual market activity in the Company’s American Depositary Shares (ADS) today and in accordance with its usual practice, the New York Stock Exchange has contacted the Company. The Company responded that it has explored financing and strategic opportunities with Guangzhou Automobile Group, and all commercial discussion remains preliminary and no definitive agreement has been entered into between the parties,” said NIO in the statement. “Therefore, the Company will not comment on market speculations. The Company will, consistent with applicable laws and listing rules and best corporate practice, announce any material information or business development promptly when required.”
Rumors emerged on January 15 that GAC Group would invest as much as $1 billion in NIO, along with other potential investors including Geely, Great Wall Motor and FAW.
GAC Group issued its own statement on January 16, also confirming that it is in preliminary discussions of investing in NIO, but no binding agreement has been reached. It also said in the statement that it and its subsidiaries would invest no more than $150 million in NIO and that investment will not have any material effect on the financial results of the company this year.
Shares of NIO rose 1.9 percent to an eight-month high of $4.37 on January 16, the sixth consecutive day of gains, the longest win streak since a seven-day streak last February.
Over the last three months, its stock has nearly tripled thanks to upbeat December deliveries data, a surge in Tesla shares and reports that NIO had secured financing for 2020.
The company delivered 20,565 vehicles in 2019 and 31,913 vehicles by the end of 2019 since deliveries began on June 28, 2018.
NIO’s joint venture with GAC Group, GAC-NIO, unveiled the HYCAN 007 smart electric SUV on December 27 at pre-sale prices of between ¥260,000 and ¥400,000. Market launch is expected in April.