NIO Inc. (NYSE:NIO) shares rose in Monday’s premarket session after the EV maker announced a battery-swapping and charging transaction with Zhejiang Geely Holding Group Co., Ltd.
Geely Holding’s automotive portfolio includes Geely Automobile Holdings Ltd. (OTC:GELFY). The transaction brings external capital into NIO Power while allowing NIO China to retain majority control.
Geely Takes 30% Stake in NIO Power
A Geely subsidiary will take a 30% stake in NIO Power, valuing the business at about 16 billion yuan (~$2.38 billion) post-money.
Geely will contribute its stake in Yiyi Internet Technology (Chongqing) Co., Ltd. plus 640 million yuan in cash. After closing, NIO China will retain a controlling 63.6% stake.
Geely’s stake could fall to no less than 20% if certain operational milestones are missed. It can also invest another 640 million yuan, potentially increasing its stake to 34% and reducing NIO China’s ownership to 60%.
NIO, Geely Expand Energy Cooperation
NIO China will also acquire a 10% stake in Zhejiang Haohan Energy Technology Co., Ltd., Geely’s battery-charging subsidiary. Haohan Energy will use the investment to purchase certain charging assets from NIO.
The companies also plan to explore wider use of battery-swapping technology across Geely-affiliated consumer and commercial vehicles.
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NIO Technical Outlook: Downtrend, Oversold Signals, Key Support
NIO remains near the bottom of its 52-week range of $3.55 to $8.02 and trades below its 20-day SMA of $3.77, 50-day SMA of $4.29, 100-day SMA of $4.83, and 200-day SMA of $5.09.
The broader trend remains weak, with the 20-day SMA below the 50-day SMA and a death cross formed in June.
Momentum is also stretched. NIO’s RSI stands at 28.97, indicating oversold conditions that can support short-term rebounds even within a broader downtrend.
Key support sits near $3.50, just below the stock’s 52-week low. A sustained move above the 20-day SMA at $3.77 would mark the first sign of improving near-term momentum.
NIO Holds Mixed Analyst Outlook
The stock carries a Hold consensus rating with an average price target of $5.50.
JPMorgan downgraded NIO to Neutral and lowered its target to $4.50 on Sept. 2. Bernstein maintained Market Perform and cut its target to $5 the same day, while Goldman Sachs upgraded NIO to Buy with a $7 target on July 13.
NIO Price Action: Nio shares were up 1.40% at $3.63 during premarket trading on Monday. The stock is trading near its 52-week low of $3.55, according to Benzinga Pro data.
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