Attempting to become the first high-end EV player to come out of China, Nio calls itself a “user enterprise” — building a dedicated customer base with exclusive owners’ clubs and generating revenue from loyal fans with lifestyle products ranging from clothing to exercise equipment.
In 2019, CEO William Li transferred 50 million company shares to a Nio User Trust to let customers “have the opportunity to discuss and propose the use of the economic benefits from the transferred shares,” according to a company filing. He retains voting rights over the shares.
That structure could now stand in the way of allowing Nio to follow rival U.S.-traded EV upstarts Xpeng, which raised $1.8 billion in July, and Li Auto, which raised $1.5 billion last month, in seeking a listing in Hong Kong.
Nio shares fell the most in almost three weeks in New York on Wednesday after the ADR sale was announced. The company debuted in the U.S. three years ago, long before China started applying greater scrutiny to offshore listings.
The capital raising may reflect “further delays in the Hong Kong listing process,” Deutsche Bank analyst Edison Yu wrote in a note Thursday.
