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In Tesla's shadow, China's NIO prices IPO at low end of target: source

Reuters  |  NEW YORK/HONG KONG 

By Joshua and Julie Zhu

NEW YORK/HONG KONG (Reuters) - Chinese electric vehicle start-up Inc priced at the bottom of its targeted price range in its U.S. on Tuesday, a person familiar with the matter said, dragged down by investor concerns about the prospects of chief competitor Inc .

Tesla's struggle to meet its production targets and an abandoned attempt by to take it private have weighed not just on its own stock, but also on peers seeking to develop mass-market electric cars.

Chinese electric carmakers are seeking capital to develop autonomous driving and wants to rapidly expand China's production to curb vehicle emissions, and promote

The IPO priced at $6.25, at the low end of its $6.25 to $8.25 target price range, will value at $6.4 billion. It is due to begin trading on Wednesday on under the symbol "NIO".

A for did not immediately respond to a request for comment.

NIO, founded by Chinese in 2014, sold $1 billion in shares in the IPO, making it the third-biggest U.S. listing by a Chinese firm this year.

At the start of the IPO process, NIO had hoped for a valuation of as much as $20 billion, according to one person familiar with the company's plans.

The IPO comes as China-U.S. trade tensions involving tit-for-tat tariffs have knocked back global stock markets.

NIO, backed by Chinese Holdings Ltd <0700.HK>, plans to use the IPO proceeds for research and development of products and technology, marketing and developing manufacturing facilities.

Its other backers include investment firms Hillhouse Capital Group, and a private equity fund established by Inc .

NIO incurred a net loss of $502.6 million in the first six months of 2018 on $6.95 million in revenues. In June, it began customer deliveries of its pure-electric, seven-seat sport-utility vehicle, which the company sees as a rival to Tesla's Model X.

NIO said in its listing prospectus that as of the end of August, it had delivered about 1,600 ES8s and had another 15,778 unfulfilled reservations for the vehicle.

It also plans to launch a second, lower-priced electric sport-utility vehicle, the ES6, by the end of this year.

such as and have also raised billions of dollars from heavyweight investors including Holding Ltd , and

Goldman Sachs, and led NIO's IPO. Also involved are Lynch, Credit Suisse, Citigroup, and

(Reporting by Joshua in New York and Julie Zhu in Hong Kong; Additional reporting by in Hong Kong; Editing by and Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, September 12 2018. 05:59 IST
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