CYVN Holdings, an investment entity controlled by the Abu Dhabi government, will invest about $738.5 million for a 7 percent stake in Nio, as the Chinese electric vehicle maker looks to bolster its balance sheet.
CYVN Holdings will gain a board seat, giving Nio a capital infusion as it contends with losses and uncertain demand in China's competitive EV market.
Shanghai-based Nio this month posted a worse-than-expected net loss in the first quarter as shipments slumped, fueling concern the company is losing ground in the highly competitive Chinese auto market.
Nio CEO William Li responded by slashing prices on all of its models in China and delaying a goal to break even by year-end.
The investment from CYVN "will further strengthen our balance sheet to power our continuous endeavors in accelerating business growth," Li said in a statement on Tuesday.
The parties agreed to "jointly pursue opportunities in Nio's international business" after the deal closes.
One of three Chinese EV makers listed in the U.S., Nio has been expanding into Europe and building an extensive network of battery swapping stations. A mass-market brand may be launched as soon as 2024.
After the earnings miss, Li said Nio needed to delay some investment in fixed assets, postpone some research and development plans, and be more cautious on its overseas expansion.
Li is still "confident" that Nio can reach its goal of delivering more than 20,000 cars every month in the second half of the year, he said last week. The company is aiming to double sales to 250,000 electric vehicles this year.
Bloomberg and Reuters contributed to this report
