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(Bloomberg) – The leading investor in Tesla Inc. after Elon Musk took an 11.4% stake in a Chinese company that aims to become a competitor in the electric vehicle manufacturing sector.
Baillie Gifford & Co. announced that it held 85.3 million shares of NIO Inc. in a regulatory filing on Tuesday. The stake was worth about $ 515 million at the close of trading on Monday. On Tuesday, when news of the participation broke out, NIO's US depository revenues climbed 22 percent.
This investment represents a vote of confidence towards the Shanghai-based electric car manufacturer. NIO, headquartered in San Jose, California, raised $ 1 billion on its US IPO last month and is currently ramping up the production of the ES8 sport utility vehicle, its first commercial product.
Musk, 47, is Tesla's chief executive and largest shareholder, with nearly 20% ownership. He is followed by Baillie Gifford, based in Edinburgh, which holds 7.7% of the company, according to data compiled by Bloomberg.
The fund manager is not the only major investor that Tesla and NIO share. Tencent Holdings Ltd., which holds 4.9% of the shares of Tesla and belongs to a special class of NIO shares, gives the Chinese giant technology representing approximately 22% of the voting rights attached to the issued shares. Tencent and Baillie Gifford both invested in NIO as part of a tour de table last year.
Tuesday's gain brings NIO back into positive territory relative to its IPO price of $ 6.26 a share. The stock had a volatile start as investors scrutinized the company's manufacturing capabilities and potential for profitability. NIO had delivered fewer than 2,000 vehicles until the date of its IPO.
NIO is one of many electric car manufacturers looking to become a local response to Tesla in China, where government incentives have helped the country become the world's largest market for clean energy vehicles. The company and companies such as Byton and Xpeng Motors Technology Ltd. attempt to conquer their users before Tesla strengthens its presence in China and German giants BMW AG and Daimler AG launch more battery-powered cars.
(Updates with NIO challenges beginning in the sixth paragraph.)
– With the help of Tian Ying.
To contact the reporter about this story: Dana Hull in San Francisco at [email protected]
To contact the editors in charge of this story: Craig Trudell at [email protected], Jamie Butters
For more articles like this, go to bloomberg.com
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