NIO Inc. (NYSE:NIO) shares fell sharply on Wednesday after the Chinese electric vehicle maker unveiled plans to raise fresh capital through a sizable equity offering.
The company announced it will issue up to 181.8 million Class A ordinary shares, split between American depositary shares (ADS), each representing one ordinary share, and direct ordinary share offerings, with final allocations determined by investor demand. Underwriters were granted a 30-day option to purchase an additional 27.3 million ADSs.
NIO said proceeds will fund research and development in smart EV technologies, the rollout of new vehicle platforms and models, and the expansion of its battery-swapping and charging infrastructure.
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The company also intends to strengthen its balance sheet and cover general corporate purposes. Morgan Stanley Asia, UBS Securities, UBS AG Hong Kong Branch, and Deutsche Bank AG Hong Kong Branch are acting as underwriters.
The capital raise comes as NIO’s shares have gained more than 44% year to date. In its latest quarter, the company reported revenue of 19.01 billion yuan ($2.65 billion), up 9% from a year earlier and 58% from the prior quarter, though below analyst expectations of $2.76 billion. Adjusted losses narrowed to 1.85 yuan (25 cents) per ADS, compared with Wall Street’s forecast for a 30-cent loss.
Vehicle deliveries in the second quarter totaled 72,056, a 26% increase year over year and 71% sequentially. Gross margin improved to 10%, driven by stronger demand for higher-end models. Chief Executive William Bin Li highlighted strong traction for the ONVO L90 and the new ES8, crediting the company’s battery-swapping and charging network as a competitive advantage.
Looking ahead, NIO guided third-quarter deliveries of 87,000 to 91,000 vehicles, up 41-47% year over year, with revenue projected between 21.81 billion and 22.88 billion yuan ($3.05-$3.19 billion). That outlook, however, fell short of Wall Street’s revenue consensus of $4.69 billion, underscoring ongoing pressure on profitability despite growth momentum.
As of June 30, 2025, NIO had 27.2 billion yuan ($3.8 billion) in cash and cash equivalents.
Price Action: NIO shares are trading lower by 9.87% to $5.66 premarket at last check Wednesday.
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