Chinese Car Company Nio Impresses in Wall Street Debut
(Photo: REUTERS/Brendan McDermid)
The Chinese car company Nio have racked up close to $1 billion during its United States market debut on Wednesday. Despite this impressive debut, many analysts have stated that Nio's initial public offering underperformed compared to what was initially expected.
Nio has been billing itself as a formidable rival to the current leader of the electric car industry, American company Tesla. With its recent debut on its rival's home base, Nio is seen as many as inching out Tesla's market. Additionally, Nio has already racked up significant attention on its home country of China, an important market that Tesla is slowly losing its grip on.
The startup, Nio, is backed by another Chinese tech giant, Tencent Holdings Ltd. Following Nio's official debut on the American market, shares of the startup's rival car markets have slightly dipped while Chinese stocks have seen quite a boost. Market analysts said that this outlook is backed by mostly positive news about China's growth and trade.
With regards to its American depositary receipts, Nio closed with a remarkable 5.4 percent uptick compared to the company's initial public offering price of $6.26. While the company's stock slumped by as much as 15 percent early on Wednesday, the company's stocks remained steady.
With its debut, Nio is now listed on the New York Stock Exchange. The company's chief financial officer Louis Hsieh stated that the company also intends to expand its way into other American stock exchanges, as well as Europe.
Mr. Hsieh added that Nio's journey towards its recent initial public offering in the United States had not been particularly a walk in the park. The company has faced several hurdles, especially with the recent trade tensions between China and the U.S.
Aside from Tesla, Nio is the only premium electric car company in China. Some observers have also pointed out the Nio's seven-seat SUV which many have noted that it is better and cheaper compared to Tesla's Model X.
In terms of car model, Nio confirmed that the company is working on the release of a new model that will rival the Tesla Model 3. Nio boasted that its upcoming model will have longer range and quicker acceleration compared to the Tesla Model 3. The best bit of this is that Nio's upcoming car will cost about two-thirds of what the current Model 3 cost.
Now that Nio is in Tesla's turf, market analysts have predicted that it will only be a matter of years, if not months before the company finally reach the mainstream consciousness.