Chinese EV maker Nio (NYSE:NIO) explored a tie-up with Mercedes-Benz and engaged in initial discussions with the German company, according to Reuters.
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According to the report, discussions about the collaboration involved Nio’s Founder and CEO William Li seeking funds from Ola Kaellenius, the CEO of Mercedes-Benz, in exchange for technological know-how. The two companies, though, have denied the market chatter.
This development puts the spotlight on legacy carmakers tying up with new-age EV makers to wade through a rapidly evolving market. Volkswagen has teamed up with China’s XPeng (NYSE:XPEV) and SAIC Motor to develop new models. BYD has partnered with India’s Megha Engineering and Infrastructures to provide EVs in the Indian market. Tesla (NASDAQ:TSLA), the pioneer in the EV space, received a $50 million fund infusion from the Mercedes Group in its early days.
For Nio, challenges are plentiful even amid rising vehicle sales. Its share price has tumbled by 21% over the past month, and last week, the company announced a proposed offering of $1 billion in convertible senior notes. The stock price decline prompted the company to address market rumors and respond to market speculation over its financials earlier this week.
What Is the Price Target for NIO?
Meanwhile, the Street has a consensus price target of $14.24 on NIO, alongside a Moderate Buy consensus rating. This points to a 68.3% potential upside in the stock.
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