The largest external stakeholder of Tesla has claimed a stake in rival Chinese EV maker, Nio, sending its share value up by 22 per cent prior to the listing of shares for the Asian EV automaker in the US.
Baillie Gifford, who holds a 9 per cent share in Tesla (Elon Musk owns 20 per cent) bought up a 11.4 per cent stake in the Chinese company, which is trying to outdo sales in its home country against EV leader Tesla.
The pricing for the IPO for Nio was announced on Wednesday September 12, when it offered 160 million shares on the New York Stock Exchange at $US6.26 per share.
In Wednesday’s premarket, share values jumped up by over 13 per cent following the news that investment firm Baillie Gifford had filed 85.3 million Nio shares with the Securities and Exchange Commission.
The investment is significant, considering that in China – the world’s largest EV market – Tesla has made $US2 billion (over $A2.8 billion) in sales, whereas Nio is positioning itself as the ‘Tesla of China’.
While many are touting the buy-in as a sign of confidence in Nio, an interview with James Anderson, one of the fund manager’s partners, suggests the move is more of a case of ‘hedging their bets’.
While Andersen admits that the firm cannot be certain about Tesla’s ability to make their clients money, “there is still a good possibility that Tesla will prove entirely and highly successful,” he told Citywire.
“But I think one should always try to phrase things in terms of probabilities and payoffs rather than certainty. We think there is a chance that we can make a lot of money for our clients in exercising this vision, which is surely good for the world, but are we certain about it? No, of course not.”
Nio officially launched its first EV, the ES8 SUV, onto the Chinese market in December 2017 – a seven-seater with 70kWh liquid cooled battery, claimed to have a range of over 500km.
The base price for the ES8 was set at RMB448,000 ($A91,500) before subsidies, and Nio claims over 17,000 customers have made reservations.
It has also reported nearly $US7 million ($A9.9 million) in revenue in the first half of 2018, but it must also be noted that the total loss was in excess of half a billion US dollars (over $A707 million).
In that regard, some might say it is indeed the Tesla of China, considering it is still in the stage of establishing profits (profits for Tesla, despite assurances by Musk in the last Q2 results call that Q3 would see Tesla in the black, are still in question according to analysts).
That said, Nio is still hard at work creating high performance EVs for both consumers—and racing car drivers.
Just this week it announced that it unveiled its brand new NIO 004 Gen 2 racing chassis titled with the hashtag #BlueSkyComing (the meaning behind the company’s name), which will be driven by French racing car driver Tom Dillmann alongside proven British driver Oliver Turvey.
In addition to the ES8 SUV, it also has the EP9, which it markets as the ‘fastest electric car in the world’, having completed the Nürburgring Nordschleife in 6 minutes and 45.9 seconds.
It also has an autonomous car concept named EVE, that it has worked on with the Israeli self-driving tech company that Intel bought up, Intel.