- Nio will raise about $1 billion through the offering to fund R&D and strengthen its balance sheet.
- About one hour before Nio's announcement was released, trading of the company's shares in Singapore was suspended pending the disclosure.
Nio Inc (NYSE: NIO) announced plans to issue new shares for financing, causing its stock to plunge in US pre-market trading.
The electric vehicle (EV) maker announced today its plan to issue up to 181,818,190 class A ordinary shares, including the issuance of American Depositary Shares (ADS), each ADS representing one class A ordinary share, and the issuance of ordinary shares.
The shares to be issued will be allocated between ADSs and ordinary shares based on investor interest, according to an announcement today.
Nio has granted the underwriters for the offering a 30-day option to purchase up to 27,272,729 ADSs, which, if exercised, will be settled solely in ADSs.
Based on Nio's Tuesday closing price of $6.28 on the US stock market, the offering would raise at least $1.1 billion. Should the underwriters exercise their option, an additional $170 million would be raised.
The company plans to use the proceeds to invest in R&D for core EV technologies, development of its brands' future technology platforms and vehicle models, expansion of its battery swap and charging network, further strengthening of its balance sheet, and general corporate purposes.
Morgan Stanley Asia Limited, UBS Securities LLC, UBS AG Hong Kong Branch and Deutsche Bank AG, Hong Kong Branch are acting as representatives for the underwriters for the offering.
Following the announcement of the plan, Nio shares plunged in premarket trading on Wednesday in the US, falling about 10 percent at the time of writing.
Notably, about one hour before Nio's announcement was released, trading of the company's shares in Singapore was suspended pending the disclosure.
The latest funding comes as Nio's shares have surged significantly over the past two months, while the company still needs to improve its financial position.
Nio's US-traded shares have climbed about 83 percent since July, driven by optimism surrounding the launch of its sub-brand Onvo's L90 SUV (sport utility vehicle) and pre-sales of the Nio ES8 SUV.
The company remains unprofitable and aims to achieve its first quarterly profit in the fourth quarter.
Nio reported a net loss of RMB 4.99 billion in the second quarter, its smallest since the fourth quarter of 2023, according to unaudited financial results released on September 2.
This net loss represents a 1.0 percent decrease from the second quarter of 2024 and a 26.0 percent reduction from the first quarter of 2025.
The company's management appears to be preparing for industry-wide weakness early next year.
The entire Chinese EV industry will face growth pressures in the first quarter of next year as national stimulus policies decrease, Nio founder, chairman, and CEO William Li said during a small-scale media briefing on September 3.
