Chinese electric vehicle (EV) manufacturer Nio disclosed on Monday that it has inked an agreement for a $2.2 billion investment from CYVN Holdings, an Abu Dhabi-based investment vehicle.
Facing challenges to its EV sales and profitability in the midst of a competitive pricing war initiated by Tesla, Nio has strategically sought to enhance efficiency by implementing workforce reductions and deferring non-core projects.
See also: Nio Announces Plans to Launch Affordable Sub-Brand in Europe by 2025
The investment deal, slated for closure in the final week of December, will result in CYVN Holdings holding a 20.1% stake in Nio’s total issued and outstanding shares. This follows a prior $1 billion investment in July.
Upon completion, CYVN will emerge as the largest single shareholder of Nio, though founder and CEO William Li will retain significant voting power through his ownership of Class ‘C’ ordinary shares.
As part of the agreement, CYVN will subscribe to 294,000,000 newly issued Class A ordinary shares priced at $7.50 each and will have the privilege of nominating two directors to Nio’s board.
See also: Nio Accelerates Urban Road Coverage Targets for Advanced Driver Assistance System
Nio, known for its Nio-branded EVs competing with premium brands such as Mercedes-Benz and BMW in China, is concurrently working on introducing two new brands for mass markets in Europe from 2025.
In a bid to enhance operational efficiency, Nio is reportedly contemplating the spin-off of its battery production unit while maintaining a focus on in-house development of key components and technologies.
