GAC Motor Co. confirmed it is considering an investment in electric vehicle startup Nio, but said the amount would not exceed $150 million, much lower than the amount speculated on in media.
It has held preliminary talks with Nio about a potential investment, but no binding agreement has been signed, GAC said Thursday in a statement.
Even if it makes an investment, the amount would be no more than $150 million, the state-owned automaker noted.
Media reports about a potential $1 billion investment are untrue, it added.
Earlier last week, an internet blog originated in China said GAC planned to invest some $1 billion in Nio. The blog was picked up by international media such as Bloomberg, triggering a surge in Nio’s stock price on the New York Stock Exchange Wednesday.
GAC and Nio run an EV joint venture in the south China city of Guangzhou where GAC is based. The partnership unveiled its first product, a compact crossover, in December. The vehicle is set to go on sale in April.
Nio, incorporated in Shanghai in 2014, has launched two products – a seven-seat SUV and a five-seat crossover. Its third product, a coupe-like crossover, is slated to hit the market in September 2020.
In 2019, the EV startup delivered 20,565 vehicles, boosting cumulative sales to nearly 32,000.
Nio has an urgent need to raise capital.
Due to continuous losses – it posted a 2.5 billion ($364 million) loss in the third quarter of 2019, its cash balance is not adequate to ensure continuous operation in the next 12 months, the company said in December.