William Li Denies NIO’s 120 Billion Yuan Gambling Agreement with Hefei Government

Recently, William Li, the founder, chairman, and CEO of NIO, stated in an interview that there is no bet agreement between NIO and the government of Hefei. It has been ‘overinterpreted’.

William Li responded to this matter last year: The industrial guidance fund in Anhui and Hefei invested in NIO in 2020, which is very important for NIO.

But NIO also repurchased a portion of its shares in 2020 and 2021. The original value of the repurchased portion was 1.5 billion yuan (approximatly $0.2 billion), and NIO has already paid back 7.5 billion yuan (approximatly $1 billion), so there is no issue of failed gambling.

In 2019, NIO suffered a loss of billions and encountered a ‘funding shortage’. In April 2020, NIO reached a strategic cooperation agreement with the State-owned Assets Supervision and Administration Commission of Hefei (Hefei SASAC). Hefei SASAC invested 7 billion yuan in NIO China, acquiring a 24.1% stake.

When the two parties cooperate, there are rumors that Hefei has demanded NIO to achieve a revenue of 120 billion yuan (approximatly $17 billion) by 2024 and launch at least six new car models as one of the gambling conditions. If the above conditions are not met, NIO will need to repurchase 7 billion yuan of investment from the Hefei government at an annual interest rate of 8.5% and bear the risk of default.

Regarding this, William Li explained that after signing a cooperation agreement with the Hefei government, NIO repurchased a portion of its shares within six months. The repurchase amount from 2020 to 2021 exceeded 8 billion yuan (approximatly $1.1 billion). ‘They (Hefei) have had good investment returns.’

Furthermore, the Secretary of the Hefei Municipal Party Committee, Yu Aihua, has also revealed that Hefei has indeed made a substantial profit from investing in NIO.

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