Recently, NIO announced that it had signed a new share subscription agreement with CYVN Holdings, an investment institution from Abu Dhabi, UAE. Through its subsidiary CYVN Investments, CYVN made a strategic investment in NIO amounting to approximately $2.2 billion (about 15.69 billion yuan) in cash, becoming NIO's largest shareholder.
Founder Li Bin is No Longer NIO's Largest Shareholder!
According to media statistics, since its founding in 2015. NIO has raised over 115 billion yuan. Li Bin once stated that he transferred 50 million shares to a user trust during the IPO, and these shares were not deducted from the equity table, meaning he has not been the largest economic shareholder for a long time. However, due to his super voting rights, he still retains the most voting power, with little change in shareholder voting dynamics. Therefore, Li Bin remains the shareholder with the largest voting power in the company, although it is unclear if he holds veto power over major decisions.
Is NIO Still Considered a Chinese Brand?
Many might wonder if NIO can still be considered a Chinese brand now that its largest shareholder is a UAE fund. The answer is yes. NIO is still considered a Chinese brand not only because it is manufactured in China and the founding team retains voting rights, but also because a brand's origin is tied to where it was founded, a globally recognized standard. For instance, even though Volkswagen acquired Bentley and BMW acquired Rolls-Royce, these brands are still considered British. Similarly, despite Geely's acquisition of Volvo, Volvo remains a Swedish brand. From this perspective, NIO is still a Chinese brand.
Another surprising example is Mercedes-Benz, whose largest shareholder is Geely, holding 9.69% of its shares and voting rights, yet Mercedes-Benz remains a German brand.
Middle Eastern Capital Shows Great Interest in Chinese New Energy Companies
In the field of new energy vehicles, besides investing in NIO, Middle Eastern funds have also invested in companies like Human Horizons and Enovate Motors, with both requiring factories to be built in the Middle East. The reason for this interest lies in the fact that Middle Eastern capital amassed wealth from oil, which is depleting. Thus, they need to diversify by investing in valuable companies worldwide. The new energy vehicle industry, being both new energy and high-tech, aligns well with their investment strategy.
The Identity of the Largest Shareholder is Less Important than Developing the Brand
For NIO, the identity of the largest shareholder is less significant than developing the brand effectively. NIO has several upcoming initiatives, including the launch of the flagship model ET9 at NIO Day on December 23. In 2024. NIO plans to introduce a new brand targeting entry-level markets. The battery swap business has already established partnerships with Changan and Geely. NIO will build both exclusive and shared battery swap networks.
NIO's various ventures, such as NIO Phone, chips, batteries, and autonomous driving, currently appear unprofitable. Although these ventures seem necessary and hold potential, they are unlikely to generate profits in the short term. Consequently, NIO will need to continue raising funds to sustain and grow the brand.
