Abu Dhabi's CYVN to Invest A Further $2.2bn in China's Nio

CYVN Holdings, an investment vehicle controlled by the government in Abu Dhabi in the United Arab Emirates, has agreed to invest $2.2 billion in electric vehicle maker Nio, the Chinese group announced on Monday.

The deal, expected to close in the final week of December, will take CYVN’s shareholding to 20.1% of Nio’s total issued and outstanding shares, and follows an investment of $1 billion in July, Nio said in a statement on its website.

The investment comes as Nio, with its EV sales and profitability under pressure in a price war started by Tesla, has sought to boost efficiency by cutting a tenth of the workforce and deferring non-core projects.

ALSO SEE: France’s Green EV Push Cuts China-Made Cars From Subsidies

Nio may spin-off battery unit

The deal will make CYVN the largest single shareholder of Nio, although founder and chief executive William Li retains the most voting power, with his ownership of Class ‘C’ ordinary shares.

CYVN, which will subscribe to 294,000,000 newly issued Class A ordinary shares priced at $7.50 each, will also be entitled to nominate two directors to Nio’s board, the company said.

The company, whose Nio-branded EVs compete with premium brands such as Mercedes-Benz and BMW in China, has been developing two new brands for mass markets that it aims to bring them to Europe from 2025, its executives have said.

In its drive to become more efficient, Nio is considering a spin-off of its battery production unit while continuing to develop technologies for key components on its own, Reuters has reported previously.