This Week’s EV News Recap
Nio’s Latest Investment
China’s Nio Inc. (NYSE:) recently announced a $2.2 billion deal with Abu Dhabi-based CYVN Holdings. As a result, CYVN’s ownership stake in NIO will increase to 20.1%. However, Nio’s founder and CEO, William Li, will retain the highest voting authority due to his ownership of Class ‘C’ ordinary shares. Once finalized, CYNV will be entitled to nominate two directors to the Company’s board, ensuring continued beneficial ownership of at least 15% of the Company’s outstanding share capital.
This deal is expected to eliminate the near-term overhang around Nio’s capital runway, providing financial stability until 2025.
NIO shares ended the week with a 0.94% increase, reaching a weekly high of $8.87/sh on Tuesday.
Mullen’s Compliance Woes
Mullen Automotive Inc (NASDAQ:) undertook a 1-for-100 reverse stock split to maintain compliance with Nasdaq’s minimum bid price requirement of $1.00 per share. The company must sustain a closing stock price at or above $1 for 20 consecutive business days by January 22, 2024, to avoid delisting. Mullen’s failure to meet the criteria and move to the over-the-counter (OTC) market could lead to several adverse consequences, including reduced liquidity and challenges in obtaining funding.
Shares of MULN closed the week down 29.46% to $9.84/sh.
Potential Tariff Increases
Reports emerged this week indicating that the U.S. government is considering raising tariffs on some Chinese goods, including electric vehicles. The Biden administration is discussing a review of the Trump-era tariffs imposed on approximately $300 billion worth of Chinese goods, with a view to finalize the process in early 2024. This action could have significant implications for global automakers, particularly those that depend on China as a key hub for exporting vehicles.
