Shares in Chinese electric vehicle (EV) firm NIO Inc surged by almost 9% in pre-market trading as the firm unveiled a $2.2 billion injection from an Abu Dhabi investor.
CYVN Holdings has agreed to purchase 294 million newly issued shares at $7.50 each, according to NIO, taking its stake in the New York-listed firm to 20.1%.
This comes as NIO faces pressure on both sales and profitability on the back of a fierce price war with electric vehicle rival Tesla Inc (NASDAQ:TSLA).
“With the enhanced balance sheet, NIO is well prepared to sharpen brand positioning, bolster sales and service capabilities,” founder William Li said in a statement.
He added that the company is also ready to “make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities”.
Though CYVN’s latest investment, which follows a US$1 billion injection in July, will see it become NIO’s majority shareholder, Li’s class C shares mean he retains most voting power.
Shares in NIO jumped 8.9% to $7.90 prior to the market’s opening.