NIO Announces Entry into Definitive Agreements for Investments in NIO China

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NIO Inc., a pioneer in China’s premium smart electric vehicle market, today announced that it entered into definitive agreements for investments in NIO China with a group of investors led by Hefei City Construction and Investment Holding (Group) Co., Ltd., CMG-SDIC Capital Co., Ltd., and Anhui Provincial Emerging Industry Investment Co., Ltd.

Under the definitive agreements, the Strategic Investors will invest an aggregate of RMB7 billion in cash into NIO (Anhui) Holding Ltd., the legal entity of NIO China. NIO will inject its core businesses and assets in China, including vehicle research and development, supply chain, sales and services and NIO Power (the “Asset Consideration”), into NIO China. The Asset Consideration is valued at RMB17.77 billion, as calculated based on 85% of the average market value of NIO Inc. over the thirty public trading days preceding April 21, 2020. Further, NIO will invest RMB4.26 billion in cash into NIO China. Upon the completion of the investments, NIO will hold 75.9% of controlling equity interests in NIO China, and the Strategic Investors will collectively hold the remaining 24.1%.

The Company expects the closing of the investments to take place in the second quarter of 2020, subject to the satisfaction of customary closing conditions. The Strategic Investors and NIO will each inject cash into NIO China in five installments, namely (i) RMB3.5 billion and RMB1.278 billion respectively within five business days of the satisfaction of closing conditions, (ii) RMB1.5 billion and RMB1.278 billion respectively on or prior to June 30, 2020, (iii) RMB1 billion and RMB0.852 billion respectively on or prior to September 30, 2020, (iv) RMB0.5 billion and RMB0.426 billion respectively on or prior to December 31, 2020, and (v) RMB0.5 billion and RMB0.426 billion respectively on or prior to March 31, 2021. Moreover, the Asset Consideration shall be injected into NIO China within one year of closing.

NIO China will establish its headquarters in the Hefei Economic and Technological Development Area (HETA), where the Company’s main manufacturing hub is located, for its business operation, research and development, sales and services, supply chain and manufacturing functions. NIO will collaborate with the Strategic Investors and HETA to develop NIO China’s business and to support the accelerated development of the smart electric vehicle sectors in Hefei in the future.

The investment is another important milestone of NIO for its long-term growth. After receiving the investments from the Strategic Investors, NIO will have more sufficient funds to support its business development, to enhance its leadership in the products and technologies of smart electric vehicles and to offer services exceeding users’ expectation. Additionally, the Company believes the launch of NIO China headquarters in Hefei enables NIO to improve its operational efficiency and to sustain its growth and competitiveness in the long run.

This press release is not an exhaustive summary of the terms of the definitive agreements. Further information regarding the investments and the terms of the definitive agreements will be included in NIO’s subsequent filings with the SEC, including its annual report on Form 20-F for the fiscal year ended December 31, 2019 (the “2019 Annual Report”). The Company is preparing the related disclosure in and translation of the documents to be filed with the 2019 Annual Report in connection with the definitive agreements.  The Company plans to rely on the 15-day extension period for filing its 2019 Annual Report under Rule 12b-25 and will file the 2019 Annual Report by May 15, 2020 as permitted under rules of the Securities and Exchange Commission.

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