NIO raises 1 billion USD, shares drop

The Chinese electric vehicle manufacturer NIO announced a share offering worth approximately one billion dollars. The company sold over 181 million American Depositary Shares (ADS) at a price of 5.57 USD each, representing about an 11.3 percent discount compared to the previous day’s closing price. This price accounted for more than 8 percent of the company’s total market value, which before the offering stood at nearly 12 billion dollars.

The market reacted immediately. NIO’s stock price fell by around 10 percent, marking the largest single-day drop since December 2023. Such a reaction is typical in cases of new share offerings because investors fear dilution of their holdings and an increase in market supply. Nevertheless, the company took advantage of a favorable growth period — its shares gained 86 percent over the past two months — to raise additional capital for further investments.

The proceeds from the offering are intended to be used for developing new electric vehicle models, expanding the charging and battery swapping network, and strengthening the company’s financial position. It is worth noting that NIO reported sales results below expectations for the last six quarters. However, in 2025 the company recorded a delivery increase — by August it had delivered over 166,000 vehicles, representing a 30 percent year-over-year growth.

In a broader context, NIO still lags behind the leaders of the Chinese electric vehicle market. For example, BYD delivered nearly 1.9 million vehicles in the same period, Tesla over 300,000, and Xpeng more than 210,000. However, the share offering could help NIO accelerate development and increase its market share.

In summary, although the market reacted to the share offering with a drop in stock price, in the longer term this may be an important step toward financial stabilization and further technological development of the company. In the short term, however, investors must expect pressure on the stock price and dilution of the value of their holdings.

Source: xStation5