Nio’s Stock Rallies Once More Following Investment Deal Potentially Worth $4.8 Billion

Shares of Nio Inc., listed in the U.S., surged toward another double-digit increase on Monday, spurred by news of a significant new investment and a continued upswing in China’s stock market.

The Shanghai-based electric vehicle manufacturer announced over the weekend that “strategic investors” would inject RMB3.3 billion (approximately $470.7 million) in cash for newly issued shares of Nio Holding Co. Ltd., which holds a controlling interest in Nio China. Concurrently, Nio will invest RMB10 billion (around $1.43 billion) for additional shares in Nio China.

Following this announcement, Nio’s stock rose by 13.8% in premarket trading, building on a 12.8% increase from Friday. The stock is poised to open at its highest levels since mid-January.

“This investment not only reflects the strategic investors’ solid support for the high-quality development of the electric vehicle industry but also highlights their strong recognition of Nio’s unique value and industry leadership,” the company stated.

Post-investment, Nio will hold an 88.3% equity interest in Nio China, with the strategic investors owning the remaining 11.7%. Additionally, Nio has the option to invest an extra RMB20 billion ($2.85 billion) in Nio China shares by December 31, 2025, potentially increasing the total investment to RMB33.3 billion ($4.75 billion).

Nio’s stock has already experienced a remarkable 61.4% increase in September alone. With Monday’s rally, it is on track for its largest monthly gain since the record 94% rise in June 2020.

Further fueling Nio’s stock growth are the stimulus measures implemented by the Chinese government to boost the economy and attract investors. The iShares China Large-Cap ETF saw a 2.4% increase in Monday’s premarket, following an impressive 18.5% jump last week.

Investor interest may also be heightened as China’s stock market will be closed from October 1 to October 7 for the Golden Week holiday, coinciding with National Day celebrations.

Since August 7, when Nio’s stock closed at its lowest price of $3.67—its lowest since May 22, 2020—the stock is set to open on Monday with an impressive 102% gain.