© Reuters Nio (NIO) signs investment agreement with Abu Dhabi's CYVN Holdings
Chinese electric car maker Nio (NYSE announced on Monday that it signed a $2.2 billion investment deal with Abu Dhabi-based CYVN Holdings.
The deal, which will close in the last week of December, will increase CYVN's stake to 20.1% of Nio's total issued and outstanding shares. This follows its previous $1 billion investment in July, as mentioned in Nio's statement on its website.
As a result, CYVN would become Nio's largest individual shareholder. However, despite this increase in ownership, founder and CEO William Li will retain ultimate voting authority due to his ownership of Class 'C' common stock.
The deal comes as Nio faces stiff competition from Tesla, hurting its electric vehicle sales and profits. To improve efficiency, they cut 10% of their workforce and delayed complementary projects.
Known for its Nio-branded electric vehicles in China, which rival Mercedes-Benz and BMW, the company plans to introduce two new mass-market brands in Europe by 2025. In an effort to further streamline, Nio is contemplating spinning off its unit of battery production. and focus on internal development of essential components.
NIO shares rose 4.11% in early trading Monday morning.
