Abu Dhabi-backed firm to invest $740 million in Chinese EV maker Nio

The news sent Nio’s US-listed shares down about 3% at $9.12.

Nio and peers Xpeng and Li Auto are among the companies competing to grab a larger EV market share in the world’s largest automotive market dominated by BYD.

Under the deal with CYVN Holdings, Nio will issue about 85 million new Class A shares at $8.72 per share to the firm.

CYVN has also entered into a deal with an affiliate of Tencent Holdings, under which it will pick up some shares of Nio.

Upon closing of both deals, CYVN will own 7% stake in Nio, the EV maker said, adding that the holding will entitle the investment firm to nominate one director to Nio’s board.

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Nio said it will pursue global business opportunities jointly with CYVN following the closing of the investment deal.The EV maker’s deliveries rose about 20% in the first quarter from 25,768 units handed over to customers, a year earlier.

Its cash and cash equivalents fell to 14.76 billion yuan ($2.15 billion) in the first three months of the year from 19.89 billion yuan at end of the fourth quarter of 2022.