Chinese electric-vehicle startup Nio, Inc. (NIO) experienced a strong rally in premarket trading on Monday, mirroring the upward trend of its US-listed domestic peers. The surge in Nio’s stock price can be attributed to the announcement of a substantial investment in its subsidiary, Nio China. This investment comes from strategic investors including Hefei Jianheng New Energy Automobile Investment Fund Partnership, Anhui Provincial Emerging Industry Investment Co., Ltd., and CS Capital Co., Ltd., who have pledged a combined 3.3 billion yuan ($470.64 million) in cash.
Nio itself has simultaneously committed to investing 10 billion yuan (approximately $1.43 billion) in cash by subscribing to newly issued shares of Nio China. These funds will be injected into Nio China in two installments, with 70% of the total investment expected by November and the remaining 30% by December. This significant combined investment of $1.9 billion underscores Nio’s ambitious expansion into the mass market segment with its new Onvo brand. The initial model launched under this sub-brand is the L60, a smart electric mid-size family SUV, with deliveries commencing over the weekend.
Nio’s Chinese counterparts, XPeng, Inc. (XPEV) and Li Auto, Inc. (LI), also saw impressive gains in premarket trading. This widespread optimism within the Chinese EV sector is largely fueled by China’s recent economic stimulus efforts, designed to revive flagging domestic growth. The Chinese market has been on a positive trajectory since the beginning of last week, reacting enthusiastically to the signals of stimulus from the People’s Bank of China and the Politburo.
On Monday, the Shanghai Composite Index closed at 3,336.50, marking an 8.06% increase. In premarket trading, Nio climbed 11.96% to $7.30, XPeng rose 7.94% to $13.73, and Li Auto gained 7.64% to $27.75, according to Benzinga Pro data. This positive momentum suggests that the Chinese EV market is poised for continued growth and innovation, with significant investment and government support driving the sector forward.
