Tesla’s Electric Car Rival Saw an 82 Percent Stock Gain One Day After IPO

Wall Street analysts had doubts over Nio's short operating history, which CFO Louis Hsieh said was "fair criticism."

A NIO vehicle sits outside of the New York Stock Exchange on Wednesday.
A Nio concept car sits outside of the New York Stock Exchange on Wednesday. Drew Angerer/Getty Images

When Tesla (TSLA) went public in 2010, the then-seven-year-old electric vehicle maker had delivered around 200 cars. Eight years later and still struggling to turn a profit, CEO Elon Musk would actually love to take the company private again (if he can); while on the side of the world, Tesla’s much younger rival has barely delivered any cars, but it’s eager to put itself under the scrutiny of Wall Street analysts and retail investors.

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Nio, a four-year-old Chinese electric car company, debuted on the New York Stock Exchange on Wednesday. In less than 36 hours, shares rose by an eye-popping 82 percent at its highest point on Thursday.

Analysts were not enthusiastic about Nio prior to the Wednesday’s trading, mainly due to the company’s short operating history and a lack of track record in sales. Nio CFO Louis Hsieh said the doubts were “fair criticism” in an interview with The Wall Street Journal on Wednesday.

That’s partly why Nio priced the IPO near the low-end of expectations at $6.26 a share, which valued the company at $6.4 billion. At this price, Nio expected to raise $1 billion in new capital. Hsieh said the funds are needed to open a new manufacturing facility in Shanghai.

After a few sluggish hours in the morning on Wednesday, shares picked up momentum to close at 5.4 percent higher for the day. And on Thursday, shares shot up to a high of $12 in an almost straight path.

Nio was founded in 2014 as NextEV by Chinese entrepreneur William Li. The company has produced a few eye-catching concept cars, such as an electric supercar called EP9 (priced at $1.48 million each, only 16 were made). But its mass-production line was largely nonexistent until much more recently.

In June of this year, Nio announced on Twitter that it had started to ship its first batch of ES8 Crossovers (priced at $66,000), the first model designed for mass production (like Tesla’s Model 3).

The company has yet to disclose how many cars it has shipped in total. Nio has been taking orders in China since December 2017.

Tesla’s Electric Car Rival Saw an 82 Percent Stock Gain One Day After IPO