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May 25, 2020 · Sina.tech
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May 25, 2020 · Sina.tech

NIO Adds 5 New Power Swap Stations in 6 Days

News EO
Apr 7, 2020
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News EO
Apr 7, 2020

NIO Q1 Deliveries Beat Expectations

NIO has announced that deliveries of its cars reached 1,533 in March, with 3,838 vehicles delivered in Q1.  The Chinese Electric Vehicle (EV) producer said Q1 car deliveries exceeded the company’s prior guidance range of 3,400 to 3,600. The company plans to start to deliver its all-new ES8, with more than 180 improvements, in April 2020. As of March 31, the company has rolled out 87 offline stores, including 22 NIO Houses and 65 NIO Spaces. The company has covered 60 Chinese cities and will keep expanding NIO Spaces in 2020. NIO shares rose 11.12% premarket to USD 2.75 at 8:08 am. The company has experienced a gradual recovery of production since a slack season which it attributes to the Spring Festival and the coronavirus impact. Despite that, EqualOcean predicts the company stock will encounter some bumps in the coming days, primarily driven by a rising concern around Chinese concept stocks and its cash-burning business model. Investors have concluded that the fallout of Luckin Coffee fraud will continue, dragging down China concept stocks across various industries. NIO and Luckin Coffee have a lot in common – the same type of headlines (say, loss-making and fast expansion), the short historical path to IPO and the same investor (Joy Capital).  “We are bearish on the Chinese companies’ US IPO pipeline, due to Luckin’s misconduct, and we see it becoming much harder for smaller ones (valued under USD 5 billion) to go public in the US. It will further impact overseas investors to be wary of Chinese companies’ accountability,” one PE investor who prefers to stay anonymous said.  On the other hand, whether NIO can break out from a cash-burning game remains in doubt. Two examples –  DiDi Chuxing and Meituan Dianping – have lasted longer. Both of them have a large total addressable market to target – urban mobility and catering, respectively. The path to profitability is even harder: DiDi is still suffering from its daily order halving, and Meituan just reached the break-even point in 2019.  “Burning through cash is not suitable or even viable for a startup to compete in a traditional industry. Producing EVs takes years of research and development. It is the same thing for making coffee. Sustained revenue growth and operation ability improvement are more important than scaling fast, ” Zhang Wei, founding partner at Shenzhen-based Co-Stone Asset Management, said.  It is also interesting to note that NIO and Luckin Coffe have another thing in common – they have been good at telling Wall Street an exciting story but have failed to bring in positive cash flows.

News EO
Apr 6, 2020
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News EO
Apr 6, 2020

Crushed by Falling Demand, Reduced Subsidies and the Virus, NIO Gasps for Air

NIO (NIO: NYSE)  was founded in 2014 by Li Bin and Qin Li Hong and is headquartered in Jiading, China. It mainly operates in the design, manufacture and sale of electric vehicles (EV), driving technologies, autonomous driving and artificial intelligence. The company’s products include the EP9 supercar and ES8, a 7-seater SUV. Once seen as a challenger to Tesla, the Chinese EV maker has been hurt by various market developments. The company started having financial problems after launching its initial public offering (IPO) in the New York Stock Exchange in September 2018. Stocks tumbled, then quickly recovered, before falling again after disappointing delivery figures that same year due to the Chinese government’s decision on reducing subsidies – which has had a massive influence on individuals’ decisions to purchase EVs. 2019 was even more disappointing for NIO due to the falling demand for EVs globally. According to the company’s end-of-year financial results, it suffered a net loss of  USD 1.2 billion for the full year 2019 – an increase of 17.2 percent from 2018. The firm delivered a combined 8,224 of its ES8 and ES6 vehicles in the fourth quarter of 2019, and a total of 20,565 vehicles for the whole year – much less than initially expected by analysts. Now the coronavirus outbreak has only made things worse, negatively affecting both production and deliveries of electric vehicles. Its cash balance – USD 151.7 million as of December 3, 2019 – isn't enough to provide the required working capital and liquidity for continuous operation in the next 12 months, the company said in a statement. As a result, the company spent the first quarter of 2020 mostly searching for funding deals to bolster its financials. In February, in return for setting up new manufacturing facilities and R&D centers in Hefei, NIO raised approximately USD 1. 42 billion from the city government. "The parties are working on the legally binding definitive documents to be signed," NIO Founder and Chief Executive Officer William Bin Li said. The company also made several private placements of convertible notes in February for an aggregate principal amount of USD 435 million to support its operations and business development. Last month, NIO announced a short-term funding deal right before its monthly payroll was due. The company said on March 5 that it had secured a deal to raise USD 235 million through the sale of short-term convertible notes to unnamed investment funds in Asia. It looks like NIO is living month to month with a ‘saving the day’ approach instead of long-term planning of its financial situation. Given all the economic hardship and the fierce competition in the market from similar companies such as BYD, Tesla, Xpeng, SAIC, Geely and BAIC, NIO needs to make up its mind and form far reaching-strategies.

News EO
Mar 6, 2020
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News EO
Mar 6, 2020

NIO Raises Third Debt Financing of 2020

NIO (NIO:NYSE), which is considered the Chinese rival of Tesla, has announced the completion of a USD 235 million funding ground by issuing short-term notes that convert into stock to several un-named Asian investment funds. The deal will close by Feb. 11, the company said. The firm raised a total of over USD 400 million over 30 days.  This news comes after the New York-listed company announced the signing of a framework agreement with the Hefei government to launch its China headquarters in Hefei, capital of Anhui Province. This deal would see NIO relocate its headquarters and manufacturing to the city in exchange for an investment of at least USD 1.4 billion, enough to keep NIO funded for at least several more quarters. The company intends to build a second plant in the city and, if the plan spans out well, it will have three plants.  NIO has been trying to secure longer-term financing for at least several months. Last October, it was reportedly close to a similar deal with the government of the district of Wuxing, in the city of Huzhou, until the government-backed out after concluding that the risks were too high. Prior to this funding, the firm raised two similar debt financing rounds on February 6 and 14, both worth USD 100 million. NIO released its third-quarter report on December 30, 90 days after the end of its corresponding quarter. It is also worth mentioning that NIO saw its sales plummet in January, with a year on year drop of 11.5%, with NIO blaming the outbreak of the COVID-19 for the negative results. The report also showed NIO’s cash position was down to just USD 274.3 million. But on June 30, 2019, NIO had USD 503 million in cash and investments on hand. That means NIO lost USD 228.7 million in the third quarter. And the company likely burned through a similar amount in the fourth quarter. It seems clear that, no matter what happens next, the company cannot afford to keep on burning through such large amounts of cash.

News EO
Mar 5, 2020
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News EO
Mar 5, 2020

CDH Injects CNY 1.35 Billion into Charging Station Operator Teld

Teld, the subsidiary of TGOOD Electric (300001:SZ), announced the completion of a CNY 1.35 billion (USD 194 million) Series A, led by two state-owned capital firms and CDH Investments, gaining traction in the massive electric vehicle charging station market. The company has established Joint Ventures (JVs) in 88 cities in China, and launched projects in 282 Chinese cities. Furthermore, the firm claimed to have built more than 190,000 charging piles, maintaining the highest market share in 70% of the cities it operates in. Apart from the strong ability to build, the firm also provides Software-as-a-Service (SaaS) products to city charging station operators, Real Estate (RE) developers, public transport and state-owned institutions, helping them with good services. Players in the niche market understand the importance of cooperation, especially when the EV market is burgeoning. As of the first half of 2019, New Energy Vehicle (NEV) ownership achieved 3.44 million, accounting for 1.37% of total car ownership.  Data collected by EVCIPA shows that Teld had achieved 148,083 charging piles as of December 2019, eclipsing StarCharge (120,404) and State Grid Corporation of China (87,846). On the other hand, Teld is in cooperation with 213 partners and has opened around 40,000 charging piles with them. As of December 2019, the total ownership of public and private charging piles in China reached 1.22 million, representing a 50.8% increase from one year before. Range anxiety has remained the major concern for consumers purchasing EVs. A number of automakers are thus investing in charging infrastructure to promote their EV sales. Tesla, along with its ambitious step of setting its Gigafactory in Shanghai, had built 1,990 public charging piles in China as of December; NIO had 1,162 piles. The company also provides battery swap services as one of the cure ways for low battery anxiety to its customers. It has 123 battery swap stations as of the end of 2019. Looking ahead, we see significant investment opportunities in the market and a synergy being established in the overall automotive ecosystem. Making charging networks more accessible to customers means a tighter control over customer data and better services for OEMs.

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Mar 3, 2020 · sohu
News EO
Feb 25, 2020
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News EO
Feb 25, 2020

NIO to Make Headquarters in Hefei, Plans New Funding and Star Listing

NIO has announced the signing of a framework agreement with the Hefei government to launch its China headquarters in Hefei, capital of Anhui Province. The company has plans to undertake a project that seeks to raise CNY 14.5 billion, around half of its market cap. JAC Motors stock (600418:SH) was perking up due to market confidence and settled at CNY 5. 35 limit-up price on February 25. Lifan Group stock (601777:SH, acquired by Lixiang in 2018) shot up 10.14% to CNY 3.26 following JAC's surge, among other auto stocks. The NIO China project aims to establish a Heifei-centered operation system involving R&D, sales and production. The company intends to build a second plant in the city and if the plan spans out well, it would have three plants, with the first being its contract manufacturer JAC, a Hefei-based state-owned enterprises (SOE) automaker and the second as Nanjing-based XPT factory. JAC and XPT factory have already resumed to production after an unexpected extended holiday due to the outbreak of the novel coronavirus (check how the virus affected China's auto industry). NIO celebrated the mass production of EC6, the third mass-produced car model of the company, which will hit the market in September. The car model is designed to benchmark Tesla's Model Y. When NIO is more integrated with Heifei and the local government in every aspect of manufacturing, the company also plans to be dual-listed. According to a local Hefei media, NIO China expects to achieve CNY 14.8 billion (USD 2 billion) sales in 2020 with the existing three types of car (ES6, ES8, EC6), CNY 12 billion sales in 2024 with six to eight mass production car models, and a total sales of CNY 42 billion sales with CNY 7.8 billion taxes from 2020 to 2025. The company plans to list on Star market in 2025, a Chinese Nasdaq-like tech board. An industry insider told EO Auto that NIO is likely to participate in JAC's mixed-ownership reform to accelerate the initial public offering (IPO). The company's founder and CEO William Li, a native of Anuhui, in an interview with Chinese auto media Chedongxi claimed that Heifei government is going to invest in NIO. An auto insider says that it is hard to start a car manufacturing business in Beijing and Shanghai because of the risk involved. China initiated SOE reforms in 2015 to stimulate their competitiveness. JAC, as a vanguard, has been exploring ways of IPO as a whole, introducing funds from JIC Investment and Employee Stock Ownership Plan (ESOP) through an entity named shortly as Shiqin (实勤). In the whole year of 2019, NIO suffered significant losses in each quarter. Workers were laid off and the company tried all possible ways to narrow the cash flow gap, from some successful convertible notes to government support. Shanghai, the company's first choice, dropped the manufacturing plant plan in the city's Jiading district, as NIO said in March 2019. Beijing's state-owned E-Town Capital was in talks with the company to support it with CNY 10 billion (USD 1.4 billion) and production facility in May 2019, without any further progress to date. Geely, also interested, reportedly has a plan to invest USD 300 million to become the firm's third-biggest shareholders. 

News EO
Feb 15, 2020
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News EO
Feb 15, 2020

NIO Raises Another USD 100 Million

This USD 100 million round is similar to the one it raised recently, with two unaffiliated Asia-based investment funds to which NIO will issue and sell convertibles. The document from the firm stated that the closing of both placements is subject to satisfaction of customary closing conditions and closure of each is expected to occur on or before February 19, 2020.  Shares of the NASDAQ-listed company slumped – just like they did last week when it announced the issuing of convertible notes via which is expected to raise USD 100 million. This time it started off at USD 4.02 and fell 6.45% to USD 3.77. Although NIO has raised a total of USD 200 million within a week through convertible bonds, we think that this sum is still not sufficient to address its capital needs. Regarding the major strategic financing expected by the industry, NIO responded that “other financing projects are still underway and positive progress has been made." This is already the second round of financing announced by NIO this month. Just on February 6, the firm said that it had completed a total of approximately USD 100 million in convertible debt financing. The investors were two Asian investment funds that had no affiliation with them, amounting to USD 70 million and approximately USD 30 million, respectively.  Taking into account the recent financing transaction, the total amount of convertible bonds issued by NIO announced through targeted issuance this year reached USD 200 million. The interest on convertible bonds issued by the firm is zero and will expire on February 4, 2021. From 6 months after the issue date to maturity, bondholders have the right to convert part or all of their bonds to NIO Class A common stock or American Depositary Shares at a price of USD 3.07 per American Depositary Share. According to Bloomberg, NIO has accumulated about USD 6 billion in losses since it was founded by William Li in 2014. Its deficit in the quarter that ended in September was USD 324.9 million. The company ended the period with USD 274.3 million in cash and equivalents and said it didn’t have enough money to continue operating another 12 months. This counts as the fourth convertible bond offering by NIO since getting listed in the US in August 2018. It raised USD 650 million by selling a five-year convertible note to investors, including Tencent and Hillhouse Capital, last January. Then nine months later a financing program of USD 200 million from main backer Tencent and NIO founder William Li Bin took place. Just over a week ago NIO announced that the company had signed a final transaction document with non-affiliated Asian investment funds. In addition, PC auto  (太平洋汽车网) reported that on February 15, according to documents submitted by Hillhouse Capital (高瓴资本) to the US Securities and Exchange Commission (SEC), as of December 31, 2019, the investment firm had no longer held NIO shares. The former was the third-largest shareholder of NIO. At the time of the firm's IPO, its shareholding reached 7.5%. With a sluggish stock price last year it fell to only USD 1.19. Hillhouse Capital began to reduce its holdings in the EV firm to 13.3689 million shares in the third quarter, which was a reduction of 68.12%.

News EO
Feb 13, 2020
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News EO
Feb 13, 2020

Epidemic Sees NIO’s Sales Plummet… and Stocks Surge

NIO reported a year-on-year sales drop of 11.5% in January, blaming the outbreak of the new coronavirus for the negative results.       In December, the company reported third-quarter earnings results that beat expectations, as its vehicle deliveries and revenues grew 35% and 21.8% from a year ago, respectively. After a fifth consecutive month of sales growth and a record-breaking month of December, the company was looking to have a decent start to the year 2020, but as of January, it sold a total of only 1598 vehicles compared to 3170 in the month before. It is worth noting that out of the total vehicles sold, only over 105 were its premium ES8 SUV, the lowest on record for the past year and a half. Despite the decrease in the number of sales, NIO’s stock jumped 1.6% to USD 3.87 on Monday. They were still trading high as of Wednesday. The USD 100 million investment that NIO announced last week may have encouraged investors to stay with the stock. At that time, the automaker reassured investors that a more positive news flow is likely to follow on this front, as it is working on additional financing projects. But if the company says that the reason for the drop in January sales is the outbreak of the coronavirus, that means we will certainly see a further decrease in sales for February. Any kind of drop in the sales puts the firm under great pressure as it has already made it clear that it doesn’t have enough cash to fund its operations for another year. Even if there was no drop, its current sales volume is already very low – perhaps too low to generate enough revenue to help it survive in this very competitive market. It wouldn’t be fair if we compared it to January 2019, because at the time NIO was only selling one model, the ES8. The company launched an affordable model ES6 in June 2019 and since then it has been the popular vehicle out of the two. As mentioned above, just last week, NIO raised USD 100 million from an investment fund, and late last year it raised USD 200 million from its CEO and Tencent. But the company is losing hundreds of millions of dollars per quarter. It finished the third quarter of 2019 with just USD 274 million in cash. According to the estimates of David Ho, founding partner of Guangzhou Xiuyong Enterprise Consulting, NIO will need to fill a funding gap of up to USD 720 million to keep its business afloat.  There is no doubt that it has been a long bumpy ride for Tesla’s Chinese counterpart. Not long after NIO’s first SUV, the ES8 hit the road, the trade war between China and the USA ignited disturbing the Chinese economy. Buyers would rather go for a cheaper SUV than buy a USD 70,000 ES8. Later in May, news about electric vehicles catching fire went viral. This forced NIO to ultimately recall nearly 5,000 ES8 SUVs, affecting the sales even further. On top of all of this Tesla became the first foreign automaker to build its own factory in China. With all this pressure NIO had eventually laid off about 3,000 employees in China and around 300 in the USA by the end of 2019.  

News EO
Feb 8, 2020
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News EO
Feb 8, 2020

NIO Announces USD 100 Million Financing Round

According to the document, NIO will issue and sell USD 70 million worth of convertible notes. The completion of the placement is required to meet customary closing conditions and is expected to occur in the second week of February.  Last month, NIO issued another convertible note to another non-affiliated Asian investment fund in a private placement on similar terms. The total principal amount of the convertible notes issued by the two placements was approximately USD 100 million. It is worth noting that the investors this time are two Asian investment funds placing US USD 70 million and approximately USD 30 million respectively; both are ‘non-affiliated parties,’ who could become pure financial investors. NIO said the move indicates that, as the current Chinese high-end electric vehicle brand, NIO’s value in the regional/international market is still recognized.  The latest outbreak of the coronavirus before the Spring Festival has put some small and medium-sized enterprises under great pressure. NIO has completed a USD 100 million convertible bond financing in a short period, hoping to take the company through these tough times.  In addition, according to Techweb, NIO confirmed that the USD 200 million convertible bond financing mentioned in the Q3 quarterly report of 2019 from Tencent had all been completed. Regarding the major strategic financing expected, NIO responded: “Other financing projects are still underway and positive progress has been made. We will disclose the progress of financing projects in accordance with disclosure requirements. At this stage, NIO’s main focus is on financing projects that bring strategic value to business development and efficiency improvements in China.” Prior to this, on December 30, NIO had warned in its quarterly report that it did not have adequate cash for continuous operation in the next 12 months and it was looking for external financing. US-listed shares of the electric-car maker then jumped 17% to USD 4.40 in late afternoon trading. Currently, China’s Tesla-rival has offices in San Jose, Shanghai, Beijing, Munich, London and 6 other locations. The company's director of public relations said last week that, looking ahead, the company plans to focus on China but also hopes to expand into other markets. At the beginning of January this year, NIO announced that it had delivered a total of 20,565 vehicles last year (among which ES8 delivered 9,132 and ES6 delivered 11,433). This number is similar to Tesla's delivery in 2013, with 22,477 vehicles sent out. In 2019, Tesla delivered about 367,500 vehicles. From 2012 to 2018, the company's deliveries were 2,650, 22,477, 31,655, 50,580, 76,295, 103,097, and 245,240 respectively.

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