Chinese electric vehicle startup Nio has raised more than $1 billion in its latest fundraising round, led by existing investor Tencent Holdings, Asia’s second-most valuable company with a market capitalisation of around $475 billion.
New investors in the round include U.S. hedge fund Lone Pine Capital, Chinese investment firm CITIC Capital and Scottish fund manager Baillie Gifford, reported Reuters.
In an attempt to give a push to the green vehicle market, the world’s largest auto market, with 28.03 million vehicles sold last year, China is at full-throttle to stop the sale of fossil-fuel powered vehicles. The country, which plans to build 800000 charging stations this year, will soon launch a timetable commencing when the ban will ultimately take effect.
Similarly, India is also mulling over the idea of shifting from diesel and petrol-run vehicles to electric-run automobiles.
Recently, Minister of Road Transport & Highways Nitin Gadkari has warned automakers in the country to move to vehicles that run on electricity, biodiesel, ethanol and compressed natural gas.
Apart from Tencent, investment firms Hillhouse Capital Group and Sequoia Capital have also invested in the Shanghai-based Nio, founded by Chinese internet entrepreneur William Li in 2014.
Nio, formerly known as NextEV, is also among the first of a raft of Chinese electric vehicle firms to launch a production vehicle, with many so far only showing concept cars.
Its first mass production car – the ES8 pure-electric, a seven-seat sport-utility vehicle is set to be released in mid- December, according to the company. Chairman Li told Reuters in April that the model would offer more features than the Tesla Model X at a lower price. Importantly, Tencent is also an investor in U.S. electric car maker Tesla Inc.
Now valued at about $5 billion, the EV startup had raised $600 million in March from Chinese tech giant Baidu.
Nio is now one of several China-backed electric vehicle startups with global ambitions. Lucid Motors and Faraday Future are probably the most well-publicized efforts, but they have been stalled over the past few months and Nio could now surprise with the latest funding round.
Tencent, one of China’s three leading internet companies along with search engine Baidu and e-commerce giant Alibaba, has recently bought an approximately 12% stake in Snap, the parent company behind the video messaging app Snapchat.