When the outside world was still deciding whether Geely should invest in NIO, NIO’s life-saving money was already available.
At the same time, the signing ceremony for Hefei major industrial projects in 2020 was also held at the JAC NIO Plant (source). Among them, the NIO China headquarters project finally settled in Hefei, with an investment of more than 10 billion yuan (around US$142million).
This means that the cooperation between E-Town Capital and NIO may have failed.
NIO’s Trafic Financing History
From last year to this year, the history of NIO’s financing is like a tragedy and comedy that has been continuously exposed and denied.
At the end of May 2019, during the NIO 2019 Q1 earnings conference call, NIO revealed that it announced that it would open a new entity, the “NIO China”, and Beijing E-Twon International Investment Development Co., Ltd. (referred to as “E-Town Capital”) would contribute RMB 10 billion to “NIO China” by cash.
E-Town Capital subsequently confirmed the news and stated to the media that it would assist “NIO China” in building or introducing a third party to jointly build “NIO China”’s advanced manufacturing base and produce the company’s second-generation platform models. Both parties are continuing their efforts to complete the final binding transaction documents.
On July 24, 2019, NIO Automotive Technology Co., Ltd. was incorporated in Yizhuang. This was regarded as a concrete proof for “NIO China” to settle in Yizhuang, Beijing.
But after that, however, neither side made any further announcements, and more news about NIO’s financing has been exposed continuously.
Last October, it was rumored that NIO was negotiating with Wuxing District of Huzhou City, Zhejiang Province for a financing intention exceeding 5 billion yuan. NIO would build a factory with an annual capacity of 200,000 vehicles in Wuxing District. At the same time, the relevant documents of Huzhou City and Wuxing District to discuss the NIO Automobile Project also came out on the Internet, emphasizing that the introduction of the NIO Smart Automobile Project was both a major opportunity and a certain risk. It was subsequently denied by Wuxing District Government.
NIO revealed that it was indeed in negotiations with many parties for financing.
On January 15, 2020, some media revealed that GAC would invest about US $ 1 billion in NIO and was raising funds. Subsequently, GAC Group issued an announcement saying: “The two parties had discussed NIO’s financing plan, but it was still in its early stages.”
The latest rumor is that Geely Automobile will invest 300 million US dollars in NIO Automobile and is expected to become the third largest shareholder of NIO.
From the news that NIO China headquarter settled in Hefei, it may be Anhui Province or Hefei that finally reached out to NIO.
Citing local media reports in Anhui province, the total investment of the eight projects signed this time was 102 billion yuan, of which 4 projects including NIO China Headquarters invest more than 10 billion yuan, and the largest investment project reached 40 billion yuan.
This means that NIO may use the NIO China headquarter project to reap more than 10 billion yuan in financing. Of course, the additional conditions must be settled in Hefei.
From an industry perspective, the eight contracted projects focus on high-end cutting-edge industries such as new energy vehicles, integrated circuits, medical health, industrial Internet, and equipment manufacturing.
Local media commented that this is highly compatible with the industrial clusters such as integrated circuits, new energy vehicles, biomedicine, and high-end equipment manufacturing that Hefei has focused on. It also achieves independent and controllable development of China’s communications industry and high-end smart electric vehicles and is of great significance in international competition.
The cooperation between NIO and JAC is expected to continue, this move will also strengthen the cooperation between JAC and NIO Automobile.
Beginning in 2016, the two sides has comprehensively cooperated in the industrial chain of new energy vehicles and intelligent connected vehicles. These include: technological innovation based on the Internet and the Internet of Things, deepening the construction of advanced manufacturing bases, and forming a highly intelligent, highly automated, and highly integrated manufacturing system capability. Optimize and integrate the resources of the supply chain system, strengthen technical cooperation on core and key components such as batteries, motors, electronic controls, and automotive electronics, and build a world-class supply chain capability system.
According to the announcement at the time, the overall scale of cooperation was about 10 billion yuan.
Subsequently, the intelligent high-end electric manufacturing base jointly built by JAC NIO started in October of the same year, and was officially put into use in the second half of 2017.
Jianghuai NIO Manufacturing Base is located in Hefei Economic and Technological Development Zone, covering an area of about 839.6 acres, with a total construction area of 230,000 square meters. According to the plan, the annual production capacity of the manufacturing base can reach 100,000 pure electric vehicles.
In the three years since its establishment, this high-end manufacturing base has become a model project in Hefei and Anhui Province. It has received a number of national leaders and visiting groups in China and abroad, and even the CEO of Volkswagen Group Herbert Diess also praised it.
The landing of NIO’s China headquarters in Hefei means that NIO’s second-generation platform models may also be produced in Hefei. NIO did not disclose whether it will continue to produce in the JAC plant or build its own new plant. We speculated that there is a high probability that it will continue to cooperate with JAC in manufacturing.
Previously, Li Bin, the founder, chairman and CEO of NIO, once told that he was very grateful to JAC. When NIO only had a few PPTs, it was willing to believe NIO and be able to come up with real money to build a new factory together.
The senior executives of JAC also told us that at the time of the transformation of the automotive industry, JAC needs to actively learn from Chinese EV new forces with innovative thinking and Internet genes. As a startup, NIO did sell more than 30,000 EVs in two years. This is what Chinese traditional car brands need to learn.
At present, NIO has not confirmed the news of financing. It is reported that NIO will announce the latest financing progress in its financial report.