NIO Inc. (NIO), founded in 2014 by Chinese entrepreneur William Li, is a Shanghai-based automobile manufacturer that specializes in designing and developing electric autonomous vehicles. The company, formerly known as NextEV, has big plans to become the Tesla Inc. (TSLA) of China and satisfy Beijing’s ambitions to rapidly expand the country’s production of sophisticated technologies, including vehicles that reduce emissions.
In September, NIO became the third-biggest U.S. listing by a Chinese firm this year. The company raised $1 billion in its initial public offering (IPO), falling short of initial expectations. The shares were priced at $6.26 a piece on Sept. 12, just above the low end of its $6.25 to $8.25 target price range. Sources told Reuters that its valuation was dragged down by investor concerns about the troubles engulfing chief competitor Tesla. Waning sentiment in Chinese companies probably also did not help.
At the start of the IPO process, NIO had hoped for a valuation of as much as $20 billion. In the end it had to settle for a market capitalization of $6.41 billion.
The shares currently trade at $7.39, with a market cap of $7.52 billion. Below are the company’s three largest individual shareholders.
In its IPO prospectus, NIO listed William Li, the founder and CEO of the electric vehicle start-up, as its biggest shareholder owning 148.6 million shares or a 14.5% stake immediately after the offering. These shares are in the form of class C shares, except for 189,253 class A shares held by Originalwish Limited, a company incorporated in British Virgin Islands and beneficially owned by Li. He promised to donate 50 million of his shares "at an appropriate time in the future" and retain his voting power.
Born in 1974, Li rose to fame after he founded Bitauto E-Commerce Co. Ltd., a provider of internet content and marketing services for China’s automotive industry, in 2000. The success of Bitauto, which employs more than 3,000 people and covers 340 cities in China, led Li to be referred to in his country as the “godfather of the transport sector.” The entrepreneur is also a chairman at ride-sharing service Dida Chuxing and was one of the first major investors in bike-sharing platform Mobike Technology Co. Ltd.
WeChat owner Tencent Holdings Ltd. (TCEHY), one of the world’s biggest internet companies, has developed a reputation for plowing billions of dollars into various start-up ventures. The Shenzhen, China-based firm was one of the first major backers in NIO and held 137.2 million shares immediately after the offering, which translates to a 13.4% stake. This includes 132 million class B shares and 5.2 million class A shares, which Tencent entities were expected to purchase at the IPO price. Tencent’s investment in NIO, as well as Tesla, feeds into its ambitions to become a leader in artificial intelligence and connected devices. Earlier this year, the internet giant secured a license to test self-driving vehicles in the city of Shenzhen.
In a filing with the Securities and Exchange Commission on Oct. 9, Baillie Gifford, the second-largest holder of Tesla stock after Elon Musk, confirmed that it had acquired an 11.4% stake in NIO, bringing the total number of shares it owns to 85.3 million. News of the UK investment management firm’s investment sent NIO’s shares up 22.35% the same day.