Arab investors, long fond of European brands, shift to Chinese EV startups

SHANGHAI – Investors from oil rich Arabian countries have long been fond of buying into European luxury and sports car brands such as Mercedes-Benz, Porsche, McLaren and Aston Martin. 

But a shift is unfolding and such investors are now developing more interest in staking out electric-vehicle startups from China. 

CYVN Holdings, an investment arm of the Abu Dhabi government, signed an agreement with Nio Inc. on acquiring a seven percent stake in the Shanghai-based EV startup for some $740 million. 

Abu Dhabi is the capital of the United Arab Emirates.

The two sides “agreed to cooperate to jointly pursue opportunities in Nio’s international business following the closing of the investment transaction,” Nio said in a statement.

The deal has made Nio the second Chinese EV startup to win the financial backing from rich Gulf countries in June, and the third to secure such funding since 2022. 

Saudi Arabia’s Ministry of Investment on June 11 struck a deal with Human Horizons to invest $5.6 billion in the EV maker founded in Shanghai in 2017 by Ding Lei, former president of General Motors’ passenger-vehicle joint venture with SAIC Motor Corp.

The deal was signed at the 10th Arab-China Business Conference in the Saudi capital of Riyadh, according to China Global Television Network, a media outlet operated by the Chinese government.

Human Horizons and the Saudi ministry aim to establish a joint venture to carry out automotive research, development, manufacturing and sales, CGTN reported.

The investments are critical for Nio and Human Horizons as both companies remain unprofitable while expanding production and developing new models. 

Nio and Human Horizons build premium electric sedans and crossovers in China. 

Will they also assemble vehicles in respective Arabian countries where they have secured new investment? 

They are likely to do so, judging by what another Chinese EV startup has done after receiving investment from an Arabian investor.

Iconiq Holding Limited is an EV maker founded by Chinese entrepreneur Alan Wu in the north China city of Tianjin in 2016.

It was renamed NWTN Inc. in June 2022.

With new capital from Sultan Investments, a leading private real estate developer in the United Arab Emirates, NWTN has built an EV manufacturing plant in the east China city of Jinhua.

NWTN has also constructed a factory in Abu Dhabi to assemble EVs with semi-knockdown kits shipped from the Jinhua plant.

In December, it delivered the first batch of 20 range-extended electric cars from the factory to local customers, NWTN, a NASDAQ-listed company, said.

Editor's note: An earlier version of this story misspelled the name of Chinese entrepreneur Alan Wu and misidentified the Middle Eastern location where his company, NWTN, has built a factory to assemble EVs with semi-knockdown kits shipped from China.