(Yicai Global) May 30 -- Electric car startup Nio plans to begin mass production this week as speculation mounts that the Tencent Holdings-backed company has filed to go public in the United States.
Shanghai-based Nio aims to have made 10,000 vehicles by the end of this year, President Qin Lihong told Yicai Global. It builds cars at a plant shared with state-owned JAC Motors, which can produce at most 100,000 units a year, but is planning its own factory in Shanghai's Jiading district to meet anticipated demand.
Nio had planned to start mass production in the first quarter in order to make deliveries by the end of that quarter, but strict quality criteria has pushed that back, Qin said. He expects cars to be delivered soon into the second half.
The firm will be keen to press on with mass production if speculation surrounding an initial public offering proves true. One source told Yicai Global that Nio plans to list in the States this September and has signed exclusive underwriting agreements with eight investment banks, including Merrill Lynch, Morgan Stanley, Goldman Sachs and Citibank. Nio executives refused to comment when contacted by Yicai Global.
It seems unlikely that Nio would need to sign exclusive deals with banks, another insider added. If true, it is merely an obstacle to make listings harder for competitors, he said. Two of Nio's rivals, WM Motor Technology and Xpeng Motors, also have plans to go public, but have not yet made any real moves toward listing.
Foreign media outlets have also reported on the potential IPO. Bloomberg cited sources close to the matter as saying Nio had submitted an initial confidential filing with the US Securities and Exchange Commission, and could be set to raise around USD2 billion.
Nio has five showrooms across China. Yicai Global visited one in Shanghai and noticed that only around 20 percent of the so-called Nio House was used for displaying vehicles. The remainder is given over to experiences and social contact.
"I think the word 'channel' is out of date," Qin said. There was previously greater distance between products and consumers and retailers emphasized channels a lot, he added, saying the internet has negated this distance.
Consumers can learn about Nio cars, order and pay for them through the company's app, Qin said. They can also use it to track a vehicle from production floor to delivery, he added. So its showrooms attach more importance to user experience, and the firm will be speeding up construction of more Nio Houses this year, he said.
Editor: James Boynton