Through a stock sale, Nio raised $1 billion, which company used to boost manufacture of its electric cars.
In an attempt to gather funds to create new models in the face of faltering sales, the China-based electric car manufacturer Nio Inc. offered $1 billion worth of stock to the public on Wednesday, which caused shares to plummet.
Wednesday’s 8.9% drop in Nio’s stock (NIO) was the largest one-day drop since it fell 10.2% on December 20, 2023.
More than 8% of the company’s current market capitalization of $11.93 billion is represented by the sizeable stock offering, which was made approximately a week after the company’s second-quarter sales missed Wall Street forecasts for the sixth consecutive quarter.
After soaring 86% over the preceding two months, the stock had only lost 1.6% this month until Tuesday, despite that mistake.
Nio sold 181.82 million shares that were listed in the United States, taking advantage of the pre-results rise. At $5.57 per share, the offering was priced 11.3% below Tuesday’s closing price of $6.28.
Because it lowers the proportion of the business that existing shareholders own, large share sales are often disliked by investors.
In afternoon trading, Nio’s stock fell 9.6%, setting it up for its largest one-day drop since it fell 10.2% on December 20, 2023.
According to Nio, the funds raised from the stock sale will be used for general business needs, strengthening its balance sheet, expanding its network of battery swapping and charging stations, and researching and developing new EV models.
According to the most recent data from the China Passenger Car Association, Nio does not rank in the top 10 list of new-energy vehicle retail deliveries in China, which gives an indication of the company’s difficulties competing with its rivals.
According to CPCA data, BYD Co. Ltd. (BYDDY) is by far the largest supplier of new-energy vehicles in China through the first seven months of 2025, having supplied 1.88 million vehicles. Tesla Inc. (TSLA) came in fifth place with 304,027 vehicles delivered, and Xpeng Inc. (XPEV) came in tenth place with 212,205 vehicles. During the period, Nio supplied 135,167 automobiles.
Nio’s stock has increased 3.2% over the last 12 months, whereas shares of BYD, which is listed in the US, have increased 33%, Tesla’s stock has increased 56.4%, and Xpeng’s shares have increased 130.5%.
