Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

NIO Just Raised $3 Billion: Here's Why

By John Rosevear - Dec 17, 2020 at 11:23AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has big plans for 2021 and beyond.

Chinese electric-vehicle maker NIO ( NIO 0.59% ) says that its planned stock offering has closed and that its banks opted to buy extra shares over and above the original amount planned.

NIO's offering of 68 million new American depositary shares was completed on Wednesday at a price of $39 per share, raising about $2.65 billion before fees. In addition, the company said, the banks underwriting its offering -- Morgan Stanley and China International Capital Corporation -- have opted to purchase an additional 10.2 million shares at the same price; that sale will close sometime today.

Once that add-on offering is completed, NIO will have raised about $3 billion.

A prototype NIO ET7, an upscale electric sedan.

NIO plans to introduce two new sedans in 2021, including the production version of the ET7 show car pictured here. Image source: NIO.

With this stock sale, NIO joined a growing list of publicly traded electric-vehicle companies that are taking advantage of high investor interest and lofty valuations to raise additional cash. NIO follows Tesla, which raised $5 billion last week; Li Auto, which raised about $1.4 billion earlier this month; and XPeng, which raised about $2.45 billion in an offering that closed last week. 

NIO said last week that it plans to use the proceeds of this offering to develop new vehicles, to fund its continuing research and development of autonomous-vehicle technologies, and to expand its sales and service network. 

CEO William Bin Li said last month that the company plans to introduce two new sedans in 2021. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NIO Inc. Stock Quote
NIO Inc.
$32.34 (0.59%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.