Nio Inc – ADR (NYSE: NIO) announced an expanded collaboration agreement with the municipal government of Hefei, China, where the automaker is headquartered.
What Happened: The expanded scope of the existing collaboration provides for Nio and the local government jointly setting up a world-class, smart electric vehicle industrial campus, Nio said in a statement.
The industrial park, to be named the Hefei Xinqiao Smart Electric Vehicle Industrial Park, will integrate R&D, manufacturing, pilot demonstration and applications and industrial support services. It will be built with international industrial innovation capacities and scale, Nio said.
For its part, Nio will do long-term development planning for the park, establishing teams in R&D, manufacturing, marketing and management. The Hefei government will provide support, attract high-quality enterprises to the park and assist in construction funding and talent.
"The signing of the framework agreement marks another significant milestone of the profound strategic partnership between NIO and Hefei," according to Nio.
Why It's Important: Groups led by the Hefei government infused $989 million in cash into Nio China in April 2020, giving the consortium of strategic investors about a 24% stake in Nio China.
The cash injection came at a time when Nio was struggling to meet financing needs.
The Hefei government and its associated parties, Nio said, will reinvest returns from their equity investments in NIO China to support the further cooperation in Hefei, and create a sound environment allowing the industry to prosper and gain global competitiveness.
NIO Price Action: Nio shares were trading down 0.69% at $57.58 at last check Thursday.