(Bloomberg) — Nio Inc. raised about $1 billion through a share sale, as the Chinese electric-vehicle maker takes advantage of a recent stock rally to fund its growth.
The Shanghai-based EV maker sold about 181.8 million new shares at HK$43.36 ($5.57) the company said in a statement. Nio said it will use the proceeds to develop future vehicle platforms and models, expand its battery swapping and charging network, and invest in research and development.
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The company’s Hong Kong-listed shares reversed a drop of as much as 4.2% to rise as much as 1.3% on Thursday. Its American depositary receipts in New York ended 8.9% lower to $5.72 on Wednesday after the announcement. They had climbed more than 40% since mid-August in the US prior to Wednesday’s drop.
The share sale “could buttress its plunging net cash position and support the ramp-up of production of its L90 and ES8 SUVs in 4Q and the launch of three new models in 2026 to help efforts to achieve greater scale,” Bloomberg Intelligence analyst Joanna Chen wrote in a note.
The company, which hasn’t posted a profit since it was founded in 2014, has had to contend with a long-running price war and overcapacity in China’s EV market. The brand is known for its battery swap model, which allows drivers to quickly change depleted cells with a fully charged battery in minutes. But that also means the company has to build expensive battery swap stations.
The carmaker said in June that it’s aiming to reduce its research and development spending by as much as 25% to help reach its break-even target by the fourth quarter.
This is the second share sale by Nio this year, after the company raised HK$4 billion in March.
Morgan Stanley, UBS Group AG and Deutsche Bank AG arranged the latest offering.
–With assistance from Linda Lew and Charlotte Yang.
(Updates with stock move in third paragraph.)
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