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Nio shares rise on backing from top investor in Tesla

By Cheng Yu | China Daily | Updated: 2018-10-11 11:12
A NIO eve concept car is on display at a motor show in Beijing. [Photo/Agencies]

Chinese electric carmaker Nio Inc's shares soared by over 22 percent on Tuesday, right after top Tesla Inc investor Baillie Gifford & Co disclosed an 11.4 percent stake in the company.

Baillie Gifford & Co, Tesla's second-largest shareholder, said in a filing with the US Securities Regulatory Commission on Tuesday that it owns 85.3 million shares of Shanghai-based Nio. The news rallied Nio's share price, which closed at $7.39 per share, rising from $6.19.

Analysts said the surge shows investors are optimistic about the company's potential, although Nio still faces many challenges in the cutthroat new energy vehicle market, especially after its IPO last month.

Founded in 2014, Nio made its debut on the New York Stock Exchange in September this year. In addition to Baillie Gifford & Co, Chinese tech giant Tencent Holdings Ltd also holds a major stake in the company.

Nio is currently ramping up efforts on its first commercial product - the ES8 SUV. The company began delivering the models in June and had sold 1,602 ES8s by the end of August.

Nio said its cars perform as well as a Tesla model, but with a cheaper price tag. Its ES8 has a starting price of 448,000 yuan ($64,722 ), compared with Tesla's Model X's base price of 920,000 yuan in China.

"Nio and Tesla are still on two different levels of development. Nio, as a newcomer in car manufacturing, still awaits market assessment," said Jia Xinguang, an independent vehicle analyst.

In China, the new energy vehicle sector is developing at an unprecedented pace as the government encourages green alternatives to ease environmental pressures. Data from the China Association of Automobile Manufacturers showed that China has held onto its position as the largest new energy vehicle market for three consecutive years, with 777,000 such cars sold last year, up 53.3 percent year-on-year.

Domestic companies including Nio, Byton and Xpeng Motors Technology Ltd as well as foreign brands such as Tesla are racing to increase their presence in the country.

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