NIO Updates IPO Prospectus, Seeking to Raise $1.32 Billion

Chinese electric-vehicle maker, NIO, has updated its initial public offering (IPO) prospectus and set terms to raise a total of $1.32 billion.

NIO, often referred to as the “Tesla of China”, is now planning an IPO of 160 million American depository shares (ADS) at a price range of $6.25 to $8.25. If launched at the top of the price range, the automaker would be able to raise a gross proceeds of $1.32 billion, just shy of what the company had hoped for before.

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NIO started selling its first production model, ES8, last December and began delivering as early as June. As of August 28, NIO has produced over 2,200 units of ES8 (1,000 more than last reported), among which 1,381 vehicles were delivered. NIO also had another 15,761 unfulfilled orders for the vehicle, with about 6,264 booked in non-refundable deposits, as the prospectus shows.

More detailed information about the company’s employee structure was revealed in the updated prospectus. As of July 31, NIO has hired a total of 6,993 full-time employees, 44 percent of which were involved in production and software development.

Operational data shown in NIO‘s previous IPO prospectus has led to doubts and criticisms. The company posted a net loss of $503 million and a revenue of just $7 million in the first half of 2018. To face the net loss, NIO is looking to turn around a profit by targeting a broader customer base.

There are also concerns of whether NIO could deliver 10,000 ES8s by the end of 2018 as promised by its founder and CEO, William Li. It is said that the update was a form of reassurance to erase such doubts.

Morgan Stanley, Goldman Sachs and J.P. Morgan are jointly underwriting the offering, along with Bank of America, Deutsche Bank AG, Citigroup, Credit Suisse Group AG, UBS Group AG and Wolfe Capital.