Chinese electric vehicle (EV) manufacturer NIo said it will set up a research and development (R&D) centre for autonomous driving and artificial intelligence in Singapore.
Nio will collaborate with Singaporean science and research institutions on the new centre.
The announcement was made by its chairman and CEO William Li, following the company’s debut on the Singapore Exchange last week. It’s now a a triple-listed company in Singapore, the US and Hong Kong.
The EV maker, which is also Tesla’s rival, did not raise funds for the listing as it did not take the traditional initial public offering process.
Nio’s shares surged in its Singapore debut. The stock rose by nearly 20 per cent, before paring most gains to close around 2.4 per cent higher.
The move to make a secondary listing of its shares in Singapore comes as Nio, among a host of other U.S.-listed Chinese companies, face a possible delisting from American exchanges because Beijing refused to allow auditing access.
Former President Donald Trump passed a law in 2020 that required U.S.-listed foreign companies to comply with higher auditing standards. Those that failed to follow the rules could be delisted.
“Indeed, U.S. listed Chinese stocks are facing regulatory pressure at the moment. But we are seeing the regulatory agencies in the two countries actively in discussion,” said Li.
“We believe by listing in three exchanges in Hong Kong, Singapore and the United States that we are offering investors more options.”
Nio’s aggressive expansion plans
Following the listing, Li unveiled Nio’s plans to export cars to Southeast Asia and open a research and development centre in Singapore for artificial intelligence and autonomous driving. He did not provide specific dates.
Li said that Nio is looking to leverage Singapore’s advantageous position as an international financial and technology centre, adding that the new hub would broaden and enhance the brand’s global R&D footprint.
The planned Singapore facility will seek advancements in digital technology, which plays an increasingly important role in competition among automakers.
Currently, Nio operates an Advanced Research & Innovation Centre in Silicon Valley, California as well as a design office in Munich, Germany.
Nio has been aggressively pursuing growth, and in less than four years, it has already produced 200,000 EVs.
By the end of this year, it will open more than 100 new stores and 50 service centres in China, as well as the expansion of its EV battery swap network.
Its headcount will be multiplied, and a second manufacturing base located at NeoPark will be up and running in the third quarter of 2022.
Outside of China, the brand is expected to enhance its presence in Europe, particularly in Norway.
Supply chain has been its biggest business challenge
Founded in 2014, the company has joined the EV race with a product line-up targeting middle-class consumers, offering customer-centric services and an innovative battery-swapping model.
Nio is currently dealing with the challenge of declining output. As of the end of April, Nio delivered 30,842 vehicles year-to-date in 2022, a year-on-year increase of 13.5 per cent. But in April, the company delivered only 5,074 vehicles, a month-on-month decrease of 49.2 per cent.
The production declines were in large part caused by supply chain volatilities connected to new COVID-19 outbreaks in certain regions of China, and the accompanying strict lockdown restrictions.
When Covid controls in April prevented Nio’s from getting parts from suppliers, the company had to temporarily suspend production. Thankfully, the company managed to restart some production a few days later.
Regardless, Li described the overall state of auto production in China as in the process of recovery while Shanghai and other parts of the country still remain under Covid controls.
Additionally, it has had to charge customers more due to the soaring prices of raw materials.
On the sales front, Li said he expects consumer demand for electric cars to persist, even if the Chinese government reduces subsidies or other policy support for the sector.
According to the China Automobile Dealers Association, domestic sales of new energy passenger vehicles reached 280,000 in April, a year-on-year increase of 50.1 per cent and a month-on-month decrease of 38.5 per cent. The figures foreshadow an uncertain trend in the EV market in China.
As it faces production challenges, an uncertain domestic market, and regulator hostility in the U.S., Nio is clearly diversifying its investment profile — a promising move for the young car company, and a sign that China’s electric vehicle industry still has a very bright future.
Featured Image Credit: Carbuyer.com.sg