Chinese carmaker NIO Inc. went public in New York today under the ticker symbol NIO but its IPO failed to impress Wall Street. The electric car company, which sees itself as a Tesla (TSLA) rival, priced its stock at $6.26 per share, slightly above the low end of its target of $6.25 to $8.25 per share. However, the stock was trading up more than 8% at 3:00 PM ET.
The proceeds from the IPO amounted to $1 billion, well below the expected level of $1.8 billion, with the company’s valuation coming to $6.4 billion. The Wall Street Journal had previously reported that Nio, which is backed by Tencent and Baidu, had set a target of $2 billion to $3 billion earlier.
Nio had sales of $7 million in the first half of 2018 with a net loss of over $500 million. The company rolled out its ES8 electric SUV last year at a price of $65,000. Nio reportedly had 17,000 orders at July-end but deliveries were below 500.
Although China is the largest global automobile market, the electric vehicle space is getting very crowded and there is tough competition from carmakers both within China and around the world. Nio has been facing a tough market environment amid general trade and currency issues in China which has affected Chinese companies in general.
Nio does not yet own a factory in China and has to depend on JAC Motors for its vehicle production, which poses certain limitations for the company. Despite this, Nio has plans to broaden its sales internationally.
Tesla meanwhile has grand plans to build a factory in Shanghai with the goal of producing 500,000 vehicles annually and the company also gets a meaningful amount of annual sales from China.