Shares of Chinese electric car startup Nio started trading on the New York Stock Exchange on Wednesday under the ticker symbol NIO.
A total 160 million shares were listed at a price of $6.26, which was just $0.01 above the lower bound range of the company's initial public offering announced in late August. It means Nio only managed to raise $1 billion and not the $1.3 billion it had hoped.
Nevertheless, the price means Nio has a total market cap of $6.41 billion, which isn't a bad deal for a car company that's only four years old and as of August has only delivered about 1,600 cars. Nio's orders are about 10 times that amount however and growing.
2018 Nio ES8
On the first day of trading, the share price quickly dropped below $6 but then bounced back to close more than 5 percent up at $6.60.
Nio was founded by Chinese entrepreneur William Li, originally as NextEV. In its last round of funding it managed to raise $1 billion from several sources including Chinese tech and investment giant Tencent. The IPO was structured to ensure voting rights remain concentrated with Li and Tencent, who retain 14.5 percent and 12.9 percent of the company, respectively.
The company plans to use the money raised for development of additional models as well as marketing and manufacturing. Nio's first volume, the mid-size ES8 electric crossover SUV, is produced under contract by established Chinese automaker Anhui Jianghuai Automobile, a partner of Volkswagen in China. The ES8 has 644 horsepower and a range of about 220 miles. Its base price in China is $65,000, which is roughly half what the rival Tesla Model X sells for in the country.
Nio EP9 at the 2018 Goodwood Festival of Speed
Nio's first model was the EP9 track-only supercar that was built in a limited run of just 16 cars.
Though Nio only sells cars in China right now the company does plan to expand sales to Europe and eventually the United States. It already has a local division based in California working on new automotive technology including self-driving capability.
Nio is among a growing number of electric car startups either based in China or backed by Chinese interests that have sprung up in recent years. Others with serious backing include names like Byton, Detroit Electric, Faraday Future, Hybrid Kinetic, Lucid, WM Motor Technology and Xpeng.