EV Maker NIO and Chinese City of Hefei Agree to Create Industrial Park

NIO and the Chinese city of Hefei will build an industrial park. And the company agreed to buy $850 million of NIO China shares from two investors.
Author:
Publish date:

Shares of NIO  (NIO) - Get Report rose Thursday after the Chinese electric-vehicle maker and the Chinese city of Hefei, where its NIO China subsidiary is based, agreed to create an industrial park for electric vehicles.

The Hefei Xinqiao Smart Electric Vehicle Industrial Park will include research and development, manufacturing, pilot demonstrations and industrial support services. The city’s government will help with construction, funding and talent acquisition.

Terms of the deal weren’t disclosed. 

NIO has produced three EV models from its Hefei-based production line since 2018, Bloomberg reports.

Meanwhile, NIO also definitively agreed to buy a total 3.305% equity interest in NIO China for 5.5 billion yuan (US$850 million, the company said in a Securities and Exchange Commission filing. 

The sellers are two minority strategic investors that invested in NIO China in April 2020.

NIO shares recently traded at $58.87, up 1.5%. They had more than quadupled over the six months through Wednesday amid investor mania for electric-vehicle stocks.

NIO shares rose Monday, after the electric-car maker said it delivered a record 7,225 vehicles in January, representing more than 350% year-on-year growth for the Shanghai-based company.

The deliveries consisted of 1,660 ES8s, the company's six-seater and seven-seater electric SUVs; 2,720 ES6s, the company's five-seater electric SUVs, and 2,845 EC6s, the five-seater electric coupe SUV. 

As of Jan. 31, cumulative deliveries of the ES8, ES6 and EC6 reached 82,866 vehicles.

Demand for NIO’s all-electric SUVs continue to attract buyers in China, a sign that Chinese consumers are back to spending on big-ticket items like cars.