A self-proclaimed Chinese rival to Tesla had a not-so-great initial public offering (IPO).
On Wednesday, Chinese electric vehicle startup NIO Inc. priced its IPO in New York at $6.26 per share, just a cent above the bottom of the range it had expected to get. The 160 million American depositary shares sold raised $1 billion - thereby valuing the company above $6 billion and far below the $20 billion mark it had hoped to achieve in the early stages.
The electric carmaker’s ES8 electric SUV sells for about $65,000, which is about half the price of the most basic version of Tesla's Model X in China. In the first half of this year, NIO recorded $7 million in sales while incurring a loss of $503 million. Tesla, on the other hand, already has a rate of about $2 billion in annual sales in China.
Unlike Tesla, NIO does not manufacture its own vehicles; instead it outsources manufacturing to Chinese car company, Anhui Jianghui Automobile Group (JAC). NIO develops the in-car technology such as the artificial intelligence system and a charging system that it claims to let drivers change their car batteries in just three minutes.
In addition to Tesla, NIO also faces competition from Chinese manufacturers including Warren Buffett-backed BYD and Byton. Also, Volkswagen and Ford are among global established automakers that are upping the ante on electric car manufacturing specifically for the Chinese market.