The investment arm of the China Development Bank has announced on Wednesday evening a plan to sell off its 4.7 million shares of NIO, an electric vehicle (EV) startup dubbed the “Tesla of China”.
The disclosure came after NIO revealed that it had suffered US$1.4 billion in losses in 2018, and had decided to scrap a planned Shanghai factory. NIO, which is listed on the New York Stock Exchange, does not have its own manufacturing facility and contracts state-owned JAC Motors to assemble its cars.
This week, NIO’s CEO downplayed pressure the impact of Tesla slashing prices for its EVs. China Development Bank’s decision to dump NIO shares—paired with Tesla’s current construction of a Shanghai plant, which is expected to be completed by the end of this year—will likely weaken market confidence in the Chinese EV automaker.