Ng Han Guan/AP
- Chinese electric-car startup Nio, known as the Tesla of China, debuted for trading in the US on Wednesday.
- Nio, backed by Chinese tech giant Tencent, failed to raise the $1.8 billion it targeted during its initial public offering.
- Nio's fundraising is an example that shows China's ambition to become a dominant global electric-vehicle producer, Reuters says.
Chinese electric-car startup Nio, which has been touted as the Tesla of China, went public in the US on Wednesday, weeks after Tesla CEO Elon Musk openly said he was considering taking his company private.
Shares of Nio debut with a sell-off, opening at $6 apiece or 4.2% below its initial-public-offering price of $6.26. The company raised $1 billion from the offering, falling short of the $1.8 billion target it had set.
iQiyi, known as the Netflix of China, is still the biggest US listing by a Chinese firm this year. iQiyi raised $2.42 billion from a Nasdaq IPO in March. Pinduoduo, an online group discounter, is the second largest at $1.63 billion.
Nio, backed by Chinese tech giant Tencent, was founded by William Li in November 2014 as NextCar and changed its name in July 2017. Tencent, its largest investor, beneficially owns all the Class B ordinary shares and represents 21.5% of the voting power. Li retains 14.5% of the business and 48.3% of the voting power, according to Bizjournals, citing the electric-car maker's filing.
Nio's public fundraising shows China's ambition to become a dominant global electric-vehicle producer as the nation bids to reduce vehicle emissions, produce high-tech industries, and compete with the likes of Tesla and other electric-car makers, Reuters says. It notes that other electric-car makers in China, such as WM Motor Technology Co and Xpeng Motor, have also raised billions from heavyweight investors including tech giants Alibaba, Baidu, and Tencent.
While Nio just started trading in the US, its competitor Tesla has been under pressure since Musk tweeted on August 7 that he was considering taking his company private at $420 a share and had "funding secured." He later reversed course, but his tweets triggered a Securities and Exchange subpoena and relentless attacks from investors betting against the company.
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