(Yicai) Oct. 8 -- Nio said it plans to enter the Middle Eastern and North African region, starting with auto deliveries in the United Arab Emirates this quarter, and will establish a research and development center for smart driving and artificial intelligence technologies in Abu Dhabi.

Nio has inked a deal with its largest shareholder CYVN Investments RSC to jointly set up the R&D center to co-develop a new car model tailored to the local market, the Shanghai-based electric vehicle startup announced on Oct. 5.

Nio also plans to set up a joint venture with CYVN, tentatively named Nio Middle East and North Africa, to develop a comprehensive service system for its vehicles in the region, it noted.

CYVN's extensive local resources will contribute to Nio's sustained growth in the MENA region, said William Li, the automaker’s founder, chairman, and chief executive, while expressing optimism about smart EV opportunities in the market.

CYVN, an Abu Dhabi-based investment firm majority-owned by the country’s government, focuses on the intelligent mobility sector. It invested USD3.3 billion for about 20.1 percent of Nio's issued and outstanding shares last year, though Li remains the controlling shareholder due to his super-voting rights.

Seen as a major future EV market, the MENA region is important for Chinese carmakers, alongside Europe and Southeast Asia. Middle Eastern companies have also been investing in China's new energy vehicle supply chain in recent years.

Countries such as Saudi Arabia and the UAE have crafted green economies and new energy transition strategies, an overseas business manager from a Chinese automaker told Yicai, adding that Chinese car manufacturers have a first-mover advantage in the NEV sector.

Investments by Middle Eastern firms in Chinese carmakers often come with conditions, including building local factories and establishing R&D centers, aiming to enhance local NEV supply chain capabilities, the executive noted. In addition, investing in Chinese NEV makers allows them to share in the dividends of China's vast market, the person added.

While pushing for overseas expansion, Nio continues boosting its domestic market investments. On Sept. 29, the company said it will increase the capital of its unit Nio China by CNY13.3 billion (USD1.8 billion), subscribing to newly issued shares worth CNY10 billion while three existing strategic investors will contribute the remaining funds.

Editors: Tang Shihua, Martin Kadiev