Chinese electric vehicle (EV) company NIO Inc. has announced the launch of a $1 billion convertible bond financing, causing its stock to drop over 4% in premarket trading. The bonds are expected to have split maturity, with half maturing in 2029 and the other half in 2030. However, specific details such as interest rates and equity conversion terms have not yet been disclosed.
The funds raised from this financing round will be used for the repayment of existing debt facilities and to strengthen NIO’s balance sheet. NIO, one of the leading Chinese EV manufacturers, has been experiencing both growing losses and gaining momentum in international sales. Chinese EV companies like NIO are expanding their market share in Europe and North America due to their comparatively cheaper models compared to Tesla’s higher-end offerings.
Renault CEO Luca de Meo recently highlighted the Chinese brands’ advantage, stating that they are “a generation ahead” of European EV manufacturers in terms of electric vehicle technology. There is a need for European companies to close the gap on costs and catch up quickly with the Chinese players.
The rivalry between Chinese and European authorities in the EV industry was evident when the European Union launched an “anti-subsidy” investigation into Chinese electric vehicle makers. Ursula von der Leyen, the European Commission president, raised concerns about the flooding of global markets with cheaper Chinese electric cars supported by substantial state subsidies. She stressed that these practices distort the market, drawing parallels to how China’s solar industry affected European competitors through unfair trade practices.
– NIO Inc. Convertible Bond Financing
– Stock Market Data (NYSE: NIO)
– European Union Investigation into Chinese EV Makers