China electric-vehicle maker and Tesla (TSLA) competitor Nio set terms Tuesday for its initial public offering, where it looks to raise $1.16 billion.
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The Nio IPO would be the first for a Chinese automaker on a U.S. exchange.
The company plans to offer 160 million American depositary shares at a price range of $6.25 to $8.25 per share. Shares are expected to begin trading on the New York Stock Exchange the week of Sept. 10, under the ticker NIO. The lead underwriters are Morgan Stanley and Goldman Sachs.
Shanghai-based Nio is targeting the premium electric-SUV segment. Its first production car is the seven-passenger ES8. It debuted in December and went into production in China earlier this spring. It costs about half the price that a Tesla Model X costs in China.
Founded in 2014, Nio is also developing a five-passenger SUV called the ES6. Deliveries start in the first half of 2019, according to the Nio IPO prospectus.
"We have strategically entered into this market in the premium EV segment and we expect this segment will become more competitive in the future as additional players enter into this segment," the Nio prospectus says. "We also expect that we will compete with international competitors, including Tesla."
Shares of Tesla dropped 2.3% to close at 311.86 on the stock market today.
Investors In Nio
Investors in Nio include Tencent Holdings (TCEHY) and JD.com (JD), both China-based technology companies.
"We collaborate with Tencent to deliver a high-quality in-car music streaming experience, and partner with JD.com for delivery services directly to and from our cars," Nio said.
Other backers include Baidu (BIDU), a China search-engine leader, and Mobileye, a developer of self-driving-car technology that Intel (INTC) acquired last year for $15.3 billion.
Click on the link for more on how Nio is taking on Tesla and what challenges it sees.
Nio says the SUV segment has witnessed the fastest growth among all passenger-vehicle segments in China in recent years. It said SUV sales volume grew from 3.7 million units in 2013 to 10.8 million units in 2017. China is the world's biggest automobile market and the top country for electric-vehicle sales.
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The post Nio IPO Looks To Raise $1.16 Billion, With Tesla In Its Sights appeared first on Investor's Business Daily.
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