Chinese electric-car builder Nio has signed a deal to license its technology to Forseven, a unit of Abu Dhabi government fund CYVN Holdings, in the latest sign of China’s increasing influence in the global electric vehicle (EV) industry.
Shanghai-based Nio, via its subsidiary Nio Technology (Anhui), allows Forseven, an EV start-up, to use Nio’s technical information, know-how, software and intellectual property for the research and development, manufacturing and distribution of vehicles, Nio said in a filing to the Hong Kong stock exchange on Monday evening.
Nio’s subsidiary will receive technology licensing fees comprising a non-refundable, fixed upfront payment on top of royalties determined based on Forseven’s future sales of licensed products, the filing said. It did not elaborate on details of the products Forseven plans to develop.
“The deal once again proves that Chinese companies are leading the transition of the global automotive industry into the EV era,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “It also creates a new revenue source for Nio, which needs increasing cash inflow to turn profitable.”
The Nio EP9 performance car on display at the Guangzhou Auto Show in Guangzhou, China, on November 17, 2023. Photo: Bloomberg
CYVN is a major investor into Nio. On December 18, Nio announced it had raised US$2.2 billion from the Abu Dhabi-based fund. The financing came after CYVN acquired a 7 per cent stake in Nio for US$738.5 million.
EVs have been a key investment area since China consolidated economic ties with the Middle East after President Xi Jinping’s visit to Saudi Arabia in December, 2022.
Investors from countries in the Middle East are increasing their investments in Chinese businesses including EV makers, battery producers and start-ups involved in autonomous driving technology as part of an effort to reduce their reliance on oil and transform their economies.
In October, Saudi Arabian smart city developer Neom invested US$100 million in Chinese autonomous driving technology start-up Pony.ai to help fund its research and development and to finance its operations.
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Chinese EV maker BYD launches electric cars in Indonesia
Chinese EV maker BYD launches electric cars in Indonesia
The two sides said they will also set up a joint venture to develop and manufacture self-driving services, autonomous vehicles and related infrastructure in key markets in the Middle East and North Africa.
At the end of 2023, Nio unveiled a pure electric executive sedan, the ET9, to take on hybrids by Mercedes-Benz and Porsche, ramping up its efforts to consolidate a foothold in the mainland’s premium car segment.
Nio said the ET9 will have a host of cutting-edge technologies the company developed, including high-performance automotive chips and a unique suspension system. It will be priced at about 800,000 yuan (US$111,158), with deliveries expected in the first quarter of 2025.
