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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2021

Commission File Number: 001-38638

NIO Inc.

(Registrant’s Name)

Building 20, 56 Antuo Road

Jiading District, Shanghai 201804

People’s Republic of China

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F       Form 40-F 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

EXPLANATORY NOTE

This Current Report on Form 6-K is hereby incorporated by reference into the Registration Statement on Form F-3 of NIO Inc. (File No. 333-239047), and shall be a part thereof from the date on which this Current Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

Exhibit Number

    

Description of Document

 

99.1

Unaudited Interim Condensed Consolidated Financial Statements for the nine months periods ended September 30, 2020 and 2021

99.2

Recent Development

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NIO Inc.

By:

/s/ Wei Feng

Name:

Wei Feng

Title:

Chief Financial Officer

Date: November 15, 2021

148500000148500000128293932128293932128293932128293932148500000148500000434684100032061000216000000005945000481322100015627770000.000.00P1YP4Y45198830000.25000.7500P7YP4YP0Y

Exhibit 99.1

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Page

Unaudited Interim Condensed Consolidated Financial Statements

Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2020 and September 30, 2021

F-2

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the Nine Months Ended September 30, 2020 and 2021

F-4

Unaudited Interim Condensed Consolidated Statements of Shareholders’ (Deficit)/Equity for the Nine Months Ended September 30, 2020 and 2021

F-5

Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2021

F-7

Notes to Unaudited Interim Condensed Consolidated Financial Statements

F-8

F-1

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)

As of December 31,

As of September 30,

    

2020

    

2021

    

2021

RMB

RMB

USD

Note 2(e)

ASSETS

 

  

 

  

 

  

Current assets:

 

  

 

  

 

  

Cash and cash equivalents

 

38,425,541

 

21,594,871

 

3,351,471

Restricted cash

 

78,010

 

3,655,717

 

567,358

Short-term investment

 

3,950,747

 

21,706,448

 

3,368,788

Trade and notes receivable

 

1,123,920

 

3,322,076

 

515,578

Amounts due from related parties

 

169,288

 

1,048,656

 

162,749

Inventory

 

1,081,553

 

1,703,005

 

264,302

Prepayments and other current assets

 

1,422,403

 

1,332,340

 

206,776

Expected credit loss provision – current

(44,645)

(47,682)

(7,400)

Total current assets

 

46,206,817

 

54,315,431

 

8,429,622

Non-current assets:

 

Long-term restricted cash

 

41,547

 

44,385

 

6,888

Property, plant and equipment, net

 

4,996,228

 

6,032,503

 

936,230

Intangible assets, net

 

613

 

3

 

Land use rights, net

 

203,968

 

200,333

 

31,091

Long-term investments

 

300,121

 

1,307,975

 

202,995

Amounts due from related parties

 

617

 

 

Right-of-use assets – operating lease

1,350,294

2,348,642

364,504

Other non-current assets

 

1,561,755

 

4,813,221

 

747,000

Expected credit loss provision – non-current

(20,031)

(51,633)

(8,013)

Total non-current assets

 

8,435,112

 

14,695,429

 

2,280,695

Total assets

 

54,641,929

 

69,010,860

 

10,710,317

LIABILITIES

 

  

 

 

  

Current liabilities:

 

  

 

 

  

Short-term borrowings

 

1,550,000

 

5,310,000

 

824,099

Trade and notes payable

 

6,368,253

 

10,798,315

 

1,675,872

Amounts due to related parties

 

344,603

 

810,104

 

125,726

Taxes payable

 

181,658

 

184,766

 

28,675

Current portion of operating lease liabilities

547,142

646,887

100,395

Current portion of long-term borrowings

 

380,560

 

1,562,777

 

242,539

Accruals and other liabilities

 

4,604,024

 

7,290,806

 

1,131,516

Total current liabilities

 

13,976,240

 

26,603,655

 

4,128,822

Non-current liabilities:

 

  

 

 

  

Long-term borrowings

 

5,938,279

 

9,826,612

 

1,525,066

Non-current operating lease liabilities

1,015,261

1,792,738

278,229

Other non-current liabilities

 

1,849,906

 

3,055,570

 

474,217

Total non-current liabilities

 

8,803,446

 

14,674,920

 

2,277,512

Total liabilities

 

22,779,686

 

41,278,575

 

6,406,334

Commitments and contingencies (Note 24)

F-2

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)

As of December 31,

As of September 30,

    

2020

    

2021

    

2021

RMB

RMB

USD

Note 2(e)

MEZZANINE EQUITY

Redeemable non-controlling interests

4,691,287

3,210,985

498,337

Total mezzanine equity

 

4,691,287

 

3,210,985

 

498,337

SHAREHOLDERS’ EQUITY

Class A Ordinary Shares (US$0.00025 par value; 2,503,736,290 and 2,503,736,290 shares authorized; 1,252,237,171 and 1,332,262,136 shares issued; 1,249,745,456 and 1,313,779,445 shares outstanding as of December 31, 2020 and September 30, 2021, respectively)

 

2,205

 

2,334

 

362

Class B Ordinary Shares (US$0.00025 par value; 128,293,932 shares authorized, issued and outstanding as of December 31, 2020 and September 30, 2021)

 

220

 

220

 

34

Class C Ordinary Shares (US$0.00025 par value; 148,500,000 shares authorized, issued and outstanding as of December 31, 2020 and September 30, 2021)

 

254

 

254

 

39

Less: Treasury shares (2,491,715 and 18,482,691 shares as of December 31, 2020 and September 30, 2021, respectively)

 

 

(1,849,600)

 

(287,053)

Additional paid in capital

 

78,880,014

 

80,022,293

 

12,419,266

Accumulated other comprehensive loss

 

(65,452)

 

(234,396)

 

(36,378)

Accumulated deficit

 

(51,648,410)

 

(53,521,799)

 

(8,306,453)

Total NIO Inc. shareholders’ equity

 

27,168,831

 

24,419,306

 

3,789,817

Non-controlling interests

 

2,125

 

101,994

 

15,829

Total shareholders’ equity

 

27,170,956

 

24,521,300

 

3,805,646

Total liabilities, mezzanine equity and shareholders’ equity

 

54,641,929

 

69,010,860

 

10,710,317

The accompanying notes are an integral part of these consolidated financial statements.

F-3

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

Nine Months Ended September 30,

    

2020

    

2021

    

2021

RMB

RMB

USD

Note 2(e)

Revenue:

 

  

 

  

 

  

Vehicle sales

 

9,008,474

 

23,954,365

 

3,717,659

Other sales

 

608,368

 

2,281,316

 

354,055

Total revenues

 

9,616,842

 

26,235,681

 

4,071,714

Cost of sales:

 

  

 

 

Vehicle sales

 

(8,146,439)

 

(19,225,123)

 

(2,983,692)

Other sales

 

(738,929)

 

(1,888,669)

 

(293,117)

Total cost of sales

 

(8,885,368)

 

(21,113,792)

 

(3,276,809)

Gross profit

 

731,474

 

5,121,889

 

794,905

Operating expenses:

 

  

 

 

Research and development

 

(1,658,327)

(2,763,336)

 

(428,863)

Selling, general and administrative

 

(2,725,465)

(4,519,883)

 

(701,475)

Other operating (loss)/income, net

(23,941)

110,158

17,096

Total operating expenses

 

(4,407,733)

(7,173,061)

 

(1,113,242)

Loss from operations

 

(3,676,259)

(2,051,172)

 

(318,337)

Interest income

 

89,885

552,772

 

85,789

Interest expenses

 

(332,174)

(561,473)

 

(87,139)

Share of (losses)/profits of equity investees, net of tax

 

(32,061)

64,207

 

9,965

Other income, net

 

39,854

131,164

 

20,356

Loss before income tax expense

 

(3,910,755)

(1,864,502)

 

(289,366)

Income tax expense

 

(4,704)

(9,018)

 

(1,400)

Net loss

 

(3,915,459)

(1,873,520)

 

(290,766)

Accretion on redeemable non-controlling interests to redemption value

 

(205,864)

 

(6,519,698)

 

(1,011,841)

Net loss attributable to non-controlling interests

 

2,703

 

131

 

20

Net loss attributable to ordinary shareholders of NIO Inc.

 

(4,118,620)

 

(8,393,087)

 

(1,302,587)

Net loss

 

(3,915,459)

 

(1,873,520)

 

(290,766)

Other comprehensive income/(losses)

 

  

 

  

 

  

Foreign currency translation adjustment, net of nil tax

 

104,920

 

(168,944)

 

(26,220)

Total other comprehensive income/(losses)

 

104,920

 

(168,944)

 

(26,220)

Total comprehensive loss

 

(3,810,539)

 

(2,042,464)

 

(316,986)

Accretion on redeemable non-controlling interests to redemption value

 

(205,864)

 

(6,519,698)

 

(1,011,841)

Net loss attributable to non-controlling interests

 

2,703

 

131

 

20

Comprehensive loss attributable to ordinary shareholders of NIO Inc

 

(4,013,700)

 

(8,562,031)

 

(1,328,807)

Weighted average number of ordinary shares used in computing net loss per share

 

  

 

  

 

  

Basic and diluted

 

1,100,928,485

 

1,561,225,055

 

1,561,225,055

Net loss per share attributable to ordinary shareholders

 

  

 

  

 

  

Basic and diluted

 

(3.74)

 

(5.38)

 

(0.83)

Weighted average number of ADS used in computing net loss per ADS

 

  

 

  

 

  

Basic and diluted

 

1,100,928,485

 

1,561,225,055

 

1,561,225,055

Net loss per ADS attributable to ordinary shareholders

 

  

 

  

 

  

Basic and diluted

 

(3.74)

 

(5.38)

 

(0.83)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) / EQUITY

(All amounts in thousands, except for share and per share data)

Accumulated

Additional

Other

Total

Non-

Ordinary Shares

Treasury Shares

Paid in

Comprehensive

Accumulated

Shareholders’

Controlling

Total

    

Shares

    

Par value

    

Shares

    

Amount

    

Capital

    

Loss

    

Deficit

    

(Deficit)/Equity

    

Interests

    

(Deficit)/Equity

Balance as of December 31, 2019

 

1,067,467,877

 

1,827

 

(2,995,217)

 

 

40,227,856

 

(203,048)

 

(46,326,321)

 

(6,299,686)

 

22,087

 

(6,277,599)

Cumulative effect of adoption of new accounting standard

 

 

 

 

 

 

 

(22,969)

 

(22,969)

 

 

(22,969)

Accretion on redeemable non-controlling interests to redemption value

(205,864)

(205,864)

(205,864)

Issuance of ordinary shares

 

184,575,000

 

321

 

 

 

14,923,086

14,923,407

14,923,407

Issuance of restricted share units

 

2,203,469

4

 

(2,203,469)

 

 

54,508

54,512

54,512

Conversion of convertible notes to ordinary shares

142,639,348

243

3,131,661

3,131,904

3,131,904

Exercise of share options

11,178,942

19

354,181

121,887

121,906

121,906

Vesting of restricted shares

 

 

 

2,197,366

 

 

3,114

 

 

 

3,114

 

 

3,114

Vesting of share options

 

 

 

 

 

123,780

 

 

 

123,780

 

 

123,780

Cancellation of restricted shares

 

(12,516)

 

 

12,516

 

 

 

 

 

 

 

Capital withdrawal by non-controlling interests

 

 

 

 

 

 

 

 

 

(15,000)

 

(15,000)

Foreign currency translation adjustment

 

 

 

 

 

 

104,920

 

 

104,920

 

 

104,920

Net loss

 

 

 

 

 

 

 

(3,912,756)

 

(3,912,756)

 

(2,703)

 

(3,915,459)

Balance as of September 30, 2020

 

1,408,052,120

 

2,414

 

(2,634,623)

 

 

58,380,028

 

(98,128)

 

(50,262,046)

 

8,022,268

 

4,384

 

8,026,652

F-5

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) / EQUITY

(All amounts in thousands, except for share and per share data)

Accumulated

Additional

Other

Total

Non-

Ordinary Shares

Treasury Shares

Paid in

Comprehensive

Accumulated

Shareholders’

Controlling

Total

    

Shares

    

Par value

    

Shares

    

Amount

    

Capital

    

Loss

    

Deficit

    

Equity

    

Interests

    

Equity

Balance as of December 31, 2020

 

1,529,031,103

 

2,679

 

(2,491,715)

 

 

78,880,014

 

(65,452)

 

(51,648,410)

 

27,168,831

 

2,125

 

27,170,956

Accretion on redeemable non-controlling interests to redemption value

 

 

 

 

 

(6,519,698)

 

 

 

(6,519,698)

 

 

(6,519,698)

Settlement of capped call options and zero strike call options (Note 11(ii))

(16,402,643)

(1,849,600)

1,849,600

Conversion of convertible senior notes to ordinary shares - related parties

7,219,872

12

148,381

148,393

148,393

Conversion of convertible senior notes to ordinary shares -third party

62,486,411

101

4,198,347

4,198,448

4,198,448

Capital injection from non-controlling interests (Note 2(n))

 

 

 

 

 

 

 

 

100,000

 

100,000

Issuance of ordinary shares

 

2,593,179

 

4

 

 

 

602,810

 

 

 

602,814

 

 

602,814

Exercise of share options

 

7,328,883

 

12

 

223,324

 

 

100,521

 

 

 

100,533

 

 

100,533

Vesting of restricted shares

 

35,587

 

 

 

 

224,142

 

 

 

224,142

 

 

224,142

Issuance of restricted shares

 

549,376

 

 

 

 

148,869

 

 

 

148,869

 

 

148,869

Vesting of share options

 

 

 

 

 

389,307

 

 

 

389,307

 

 

389,307

Cancellation of restricted shares

(188,343)

188,343

Foreign currency translation adjustment

(168,944)

(168,944)

(168,944)

Net loss

 

 

 

 

 

 

 

(1,873,389)

 

(1,873,389)

 

(131)

 

(1,873,520)

Balance as of September 30, 2021

 

1,609,056,068

 

2,808

 

(18,482,691)

 

(1,849,600)

 

80,022,293

 

(234,396)

 

(53,521,799)

 

24,419,306

 

101,994

 

24,521,300

F-6

NIO INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands, except for share and per share data)

Nine Months Ended September 30,

    

2020

    

2021

    

2021

RMB

RMB

USD

Note 2(e)

CASH FLOWS FROM OPERATING ACTIVITIES

 

  

 

  

 

  

Net loss

 

(3,915,459)

 

(1,873,520)

 

(290,766)

Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:

 

 

 

Depreciation and amortization

 

764,820

 

1,145,509

 

177,780

Expected credit loss expense

5,945

38,283

5,941

Impairment on other assets

27,943

Foreign exchange loss/(gain)

75,906

(122,057)

(18,943)

Share-based compensation expenses

 

126,895

 

613,449

 

95,206

Gain from the re-measurement for an equity investment to cost method

 

(822)

 

 

Share of losses/(profits) of equity investees, net of tax

32,883

(64,207)

(9,965)

Amortization of right-of-use assets

 

349,362

 

439,201

 

68,163

Loss on disposal of property, plant and equipment

 

26,376

 

6,241

 

969

Changes in operating assets and liabilities:

 

  

 

  

 

  

Prepayments and other current assets

 

21,473

 

198,282

 

30,774

Inventory

 

(151,748)

 

(629,216)

 

(97,653)

Other non-current assets

 

738,687

 

(952,593)

 

(147,840)

Amount due from related parties

(878,751)

(136,380)

Operating lease liabilities

(323,253)

(534,076)

(82,887)

Taxes payable

 

(11,868)

 

3,468

 

538

Trade and notes receivable

 

(137,580)

 

(2,201,857)

 

(341,723)

Trade and notes payable

 

1,860,581

 

4,493,823

 

697,430

Long-term receivables

 

(15,281)

 

(2,175,235)

 

(337,591)

Non-current deferred revenue

 

230,560

 

580,713

 

90,125

Accruals and other liabilities

 

(125,996)

 

1,117,277

 

173,399

Amount due to related parties

465,501

72,245

Other non-current liabilities

 

223,864

 

665,599

 

103,299

Net cash (used in)/provided by operating activities

 

(196,712)

 

335,834

 

52,121

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

  

 

  

Purchase of property, plant and equipment and intangible assets

 

(952,357)

 

(2,394,919)

 

(371,686)

Purchases of short-term investments

 

(2,967,610)

 

(88,161,796)

 

(13,682,496)

Proceeds from sale of short-term investments

 

352,990

 

70,364,450

 

10,920,391

Acquisitions of equity investees

 

(257,500)

 

(293,700)

 

(45,582)

Purchase of available-for-sale debt investments

 

 

(650,000)

 

(100,878)

Proceeds from disposal of property and equipment

163,072

908

141

Net cash used in investing activities

 

(3,661,405)

 

(21,135,057)

 

(3,280,110)

CASH FLOWS FROM FINANCING ACTIVITIES

 

  

 

  

 

  

Proceeds from exercise of stock options

 

96,395

 

123,277

 

19,132

Capital withdrawal by non-controlling interests

 

(10,500)

 

(1,000)

 

(157)

Capital injection from redeemable non-controlling interests

5,000,000

Capital injection from non-controlling interests

100,000

15,520

Redemption and repurchase of redeemable non-controlling interests

(511,458)

(6,000,000)

(931,184)

Proceeds from issuance of convertible promissory note

 

3,105,127

 

9,560,755

 

1,483,806

Proceeds from borrowings

 

645,461

 

4,380,000

 

679,765

Repayments of borrowings

 

(721,192)

 

(1,212,322)

 

(188,149)

Principal payments on finance leases

(32,571)

(25,164)

(3,905)

Proceeds from issuance of ordinary shares, net of issuance cost

 

14,943,840

 

602,814

 

93,555

Net cash provided by financing activities

 

22,515,102

 

7,528,360

 

1,168,383

Effects of exchange rate changes on cash, cash equivalents and restricted cash

 

(91,270)

 

20,738

 

3,218

NET (DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

18,565,715

 

(13,250,125)

 

(2,056,388)

Cash, cash equivalents and restricted cash at beginning of the period

 

989,869

 

38,545,098

 

5,982,105

Cash, cash equivalents and restricted cash at end of the period

 

19,555,584

 

25,294,973

 

3,925,717

NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

Accruals related to purchase of property and equipment

 

716,071

 

881,407

 

136,792

Issuance of restricted shares

54,512

148,869

23,104

Conversion of convertible senior notes to ordinary shares

3,131,904

4,346,841

674,619

Accretion on redeemable non-controlling interests to redemption value

205,864

6,519,698

1,011,841

Supplemental Disclosure

 

  

 

  

 

  

Interest paid

 

207,039

 

159,993

 

24,831

Income taxes paid

 

12,902

 

6,283

 

975

The accompanying notes are an integral part of these consolidated financial statements.

F-7

NIO INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except for share and per share data)

1.    Organization and Nature of Operations

NIO Inc. (“NIO”, or “the Company”) was incorporated under the laws of the Cayman Islands in November 2014, as an exempted company with limited liability. The Company was formerly known as NextCar Inc.. It changed its name to NextEV Inc. in December 2014, and then changed to NIO Inc. in July 2017. The Company, its subsidiaries and consolidated variable interest entities (“VIEs”) are collectively referred to as the “Group”.

The Group designs and develops high-performance fully electric vehicles. It launched the first volume manufactured electric vehicle, the ES8, to the public in December 2017. The Group jointly manufactures its vehicles through strategic collaboration with other Chinese vehicle manufacturers. The Group also offers power solutions and comprehensive value-added services to its users. As of December 31, 2020 and September 30, 2021, its primary operations are conducted in the People’s Republic of China (“PRC”). The Group began to sell its first vehicles in June 2018. As of September 30, 2021, the Company’s principal subsidiaries and VIEs are as follows:

    

Equity

    

Place and Date of incorporation

    

Subsidiaries

interest held

or date of acquisition

 Principal activities

NIO NextEV Limited ("NIO HK") (formerly known as NextEV Limited)

 

100%

Hong Kong, February 2015

 

Investment holding

NIO GmbH (formerly known as NextEV GmbH)

 

100%

Germany, May 2015

 

Design and technology development

NIO Holding Co., Ltd. ("NIO Holding") (formerly known as NIO (Anhui) HoldingCo., Ltd.)

100%

Anhui, PRC, November 2017

Headquarter

NIO Co., Ltd. ("NIO SH") (formerly known as NextEV Co., Ltd.)

100%

Shanghai, PRC, May 2015

 

Headquarter and technology development

NIO Automobile (Anhui) Co., Ltd. ("NIO AH")

100%

Anhui, PRC, August 2020

Industrialization and technology development

NIO Automobile Technology (Anhui) Co.,

100%

Anhui, PRC, August 2020

Design and technology development

NIO Financial Leasing Co., Ltd. ("NIO Leasing")

100%

Shanghai, PRC, August 2018

Financial Leasing

NIO USA, Inc. ("NIO US") (formerly known as NextEV USA, Inc.)

100%

United States, November 2015

Technology development

XPT Limited (“XPT”)

 

100%

Hong Kong, December 2015

 

Investment holding

NIO Performance Engineering Limited ("NPE")

 

100%

United Kingdom, July 2019

 

Marketing and technology development

NIO Sport Limited ("NIO Sport") (formerly known as NextEV NIO Sport Limited)

100%

Hong Kong, April 2016

Racing management

XPT Technology Limited ("XPT Technology")

 

100%

Hong Kong, April 2016

 

Investment holding

XPT Inc. ("XPT US")

 

100%

United States, April 2016

 

Technology development

XPT (Jiangsu) Investment Co., Ltd. (“XPT Jiangsu”)

 

100%

Jiangsu, PRC, May 2016

 

Investment holding

Shanghai XPT Technology Limited

 

100%

Shanghai, PRC, May 2016

 

Technology development

XPT (Nanjing) E-Powertrain Technology Co., Ltd. (“XPT NJEP”)

 

100%

Nanjing, PRC, July 2016

 

Manufacturing of E-Powertrain

XPT (Nanjing) Energy Storage System Co., Ltd. (“XPT NJES”)

 

100%

Nanjing, PRC, October 2016

 

Manufacturing of battery pack

NIO Power Express Limited (“PE HK)

 

100%

Hong Kong, January 2017

 

Investment holding

Nio User Enterprise Limited (“UE HK”)

 

100%

Hong Kong, February 2017

 

Investment holding

NIO Sales and Services Co., Ltd. ("UE CNHC") (formerly known as Shanghai NIO Sales and Service Co., Ltd. )

 

100%

Shanghai, PRC, March 2017

 

Investment holding and sales and after sales management

NIO Energy Investment (Hubei) Co., Ltd. (“PE CNHC”)

 

100%

Wuhan PRC, April 2017

 

Investment holding

Wuhan NIO Energy Co., Ltd. (“PE WHJV”)

 

100%

Wuhan, PRC, May 2017

 

Investment holding

XTRONICS (Nanjing) Automotive Intelligent Technologies Co. Ltd. (“XPT NJWL”)

 

50%

Nanjing, PRC, June 2017

 

Manufacturing of components

XPT (Jiangsu) Automotive Technology Co., Ltd. (“XPT AUTO”)

 

100%

Nanjing, PRC, May 2018

 

Investment holding

    

Economic

    

Place and Date of incorporation

VIE and VIE’s subsidiaries

interest held

or date of acquisition

Prime Hubs Limited (“Prime Hubs”)

 

100%

BVI, October 2014

Beijing NIO Network Technology Co., Ltd. (“NIO BJTECH”)

 

100%

Beijing, PRC, July 2017

As of September 30, 2021, the Company indirectly held 92.114% of total paid-in capital of NIO Holding. In accordance with NIO Holding’s share purchase agreement, the redemption of the non-controlling interests is at the holders’option and is upon the occurrence of the events that are not solely within the control of the Company. Therefore, these redeemable non-controlling interests in NIO Holding were classified as mezzanine equity and are subsequently accreted to the redemption price using the agreed interest rate as a reduction of additional paid in capital (Note 19). Excluding the redeemable non-controlling interests, the Company indirectly held 100% of the equity interests of NIO Holding as of September 30, 2021.

As of September 30, 2021, the Company indirectly held 51% of total paid-in capital of PE WHJV. In accordance with the joint investment agreement, the investment by Wuhan Donghu New Technology Development Zone Management Committee (“Wuhan Donghu”) is accounted for as a loan because it is only entitled to fixed interests and subject to repayment within five years or upon the financial covenant violation (Note 11(iv)). Excluding the interests held by Wuhan Donghu, the Company indirectly held 100% of the equity interests of PE WHJV as of September 30, 2021.

F-8

NIO INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except for share and per share data)

In accordance with the Article of Association of XPT NJWL, the Company has the power to control the board of directors of XPT NJWL to unilaterally govern the financial and operating policies of XPT NJWL and the non-controlling shareholder does not have substantive participating rights, therefore, the Group consolidates this entity.

Variable interest entity

NIO Technology Co., Ltd (“NIO SHTECH”) was established by Li Bin and Qin Lihong (the “Nominee Shareholders”) in November 2014. In 2015, NIO SH, NIO SHTECH, and the Nominee Shareholders of NIO SHTECH entered into a series of contractual agreements, including a loan agreement, an equity pledge agreement, an exclusive call option agreement and a power of attorney that irrevocably authorized the Nominee Shareholders designated by NIO SH to exercise the equity owner’s rights over NIO SHTECH. These agreements provided the Company, as the only shareholder of NIO SH, with effective control over NIO SHTECH to direct the activities that most significantly impact NIO SHTECH’s economic performance and enabled the Company to obtain substantially all of the economic benefits arising from NIO SHTECH. Management concluded that NIO SHTECH was a variable interest entity of the Company and the Company was the ultimate primary beneficiary of NIO SHTECH and hence consolidated the financial results of NIO SHTECH in the Group’s consolidated financial statements. In April 2018, the above mentioned contractual agreements were terminated. On the same day, NIO SHTECH became a subsidiary wholly owned by Shanghai Anbin Technology Co., Ltd. (“NIO ABTECH”), who also became a VIE of the Group on that day, according to a series of contractual arrangements with the Nominee Shareholders as well as NIO ABTECH, including a loan agreement, an equity pledge agreement, an exclusive call option agreement and a power of attorney that irrevocably authorized the Nominee Shareholders designated by NIO SH to exercise the equity owner’s rights over NIO ABTECH. These agreements provided the Company, as the only shareholder of NIO SH, with effective control over NIO ABTECH to direct the activities that most significantly impact their economic performance and enabled the Company to obtain substantially all of the economic benefits arising from them. Management concluded that NIO ABTECH was a variable interest entity of the Company and the Company was the ultimate primary beneficiary of NIO ABTECH and hence consolidated the financial results of NIO ABTECH in the Group’s consolidated financial statements. On March 31, 2021, NIO SH, NIO ABTECH and each shareholder of NIO ABTECH entered into agreement to terminate all above mentioned contractual agreements among NIO SH, NIO ABTECH and its shareholders, after which, the Company no longer has effective control over NIO ABTECH, receives any economic benefits of NIO ABTECH, has an exclusive option to purchase all or part of the equity interests in NIO ABTECH when and to the extent permitted by the PRC law, or consolidates the financial results of NIO ABTECH and its subsidiaries as the Company’s variable interest entity. Since NIO SHTECH did not have significant operations, nor any material assets or liabilities in history, the deconsolidation of NIO ABTECH and its subsidiaries did not have significant impact on the Company’s consolidated financial statements.

In April 2018, NIO SH entered into a series of contractual arrangements with the Nominee Shareholders as well as NIO BJTECH, including a loan agreement, an equity pledge agreement, an exclusive call option agreement and a power of attorney that irrevocably authorized the Nominee Shareholders designated by NIO SH to exercise the equity owner’s rights over NIO BJTECH. These agreements provide the Company, as the only shareholder of NIO SH, with effective control over NIO BJTECH to direct the activities that most significantly impact their economic performance and enable the Company to obtain substantially all of the economic benefits arising from NIO BJTECH. Management concluded that NIO BJTECH is a variable interest entity of the Company and the Company is the ultimate primary beneficiary of NIO BJTECH and hence consolidates the financial results of NIO BJTECH in the Group’s consolidated financial statements. As of December 31, 2020 and September 30, 2021, NIO BJTECH did not have significant operations, nor any material assets or liabilities.

In October 2014, Prime Hubs, a British Virgin Islands (“BVI”) incorporated company and a consolidated variable interest entity of the Group, was established by the shareholders of the Group to facilitate the adoption of the Company’s employee stock incentive plans. The Company entered into a management agreement with Prime Hubs and Li Bin. The agreement provides the Company with effective control over Prime Hubs and enables the Company to obtain substantially all of the economic benefits arising from Prime Hubs. As of December 31, 2020 and September 30, 2021, Prime Hubs held 4,250,002 Class A Ordinary Shares of the Company, respectively.

Liquidity and Going Concern

The Group’s unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due.

The Group has been incurring losses from operations since inception. The Group incurred net losses of RMB3.9 billion and RMB1.9 billion for the nine months ended September 30, 2020 and 2021, respectively. Accumulated deficit amounted to RMB51.6 billion and RMB53.5 billion as of December 31, 2020 and September 30, 2021, respectively.

F-9

NIO INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except for share and per share data)

As of September 30, 2021, the Group’s balance of cash and cash equivalents was RMB21.6 billion and the Group had net current assets of RMB27.7 billion. Management has evaluated the sufficiency of its working capital and concluded that the Group’s available cash and cash equivalents, short-term investments, cash generated from operations will be sufficient to support its continuous operations and to meet its payment obligations when liabilities fall due within the next twelve months from the date of issuance of these unaudited interim condensed consolidated financial statements. Accordingly, management continues to prepare the Group’s unaudited interim condensed consolidated financial statements on going concern basis.

2.    Summary of Significant Accounting Policies

(a) Basis of presentation

The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. The interim financial data as of September 30, 2021 and for the nine months ended September 30, 2020 and 2021 is unaudited. In the opinion of management, the interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the interim periods.

(b) Principles of consolidation

The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIE for which the Company is the ultimate primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to appoint or remove the majority of the members of the board of directors (the “Board”): to cast majority of votes at the meeting of the Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

All significant transactions and balances between the Company, its subsidiaries and the VIE have been eliminated upon consolidation. The non-controlling interests in consolidated subsidiaries are shown separately in the unaudited interim condensed consolidated financial statements.

(c) Use of estimates

The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the unaudited interim condensed consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, standalone selling price of each distinct performance obligation in revenue recognition, the valuation and recognition of share-based compensation arrangements, depreciable lives of property, equipment and software, assessment for impairment of long-lived assets, inventory valuation for excess and obsolete inventories, lower of cost and net realizable value of inventories, valuation of deferred tax assets, current expected credit loss of receivables, as well as warranty liabilities. Actual results could differ from those estimates.

(d) Functional currency and foreign currency translation

The Group’s reporting currency is the Renminbi (“RMB”). The functional currency of the Company and its subsidiaries which are incorporated in HK is United States dollars (“US$”), except NIO Sport which operates mainly in United Kingdom and uses Great Britain pounds (“GBP”). The functional currencies of the other subsidiaries and the VIE are their respective local currencies. The determination of the respective functional currency is based on the criteria set out by ASC 830, Foreign Currency Matters.

F-10

NIO INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except for share and per share data)

Transactions denominated in currencies other than in the functional currency are translated into the functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains or losses arising from foreign currency transactions are included in the consolidated statements of comprehensive loss.

The financial statements of the Group’s entities of which the functional currency is not RMB are translated from their respective functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Income and expense items are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive gain or loss, and the accumulated foreign currency translation adjustments are presented as a component of accumulated other comprehensive loss in the consolidated statements of shareholders’ (deficit)/equity. Total foreign currency translation adjustment income/(losses) were an income of RMB104,920 and a loss of RMB168,944 for the nine months ended September 30, 2020 and 2021, respectively. The grant-date fair value of the Group’s share-based compensation expenses is reported in US$ as the respective valuation is conducted in US$ as the shares are denominated in US$.

(e) Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the nine months ended September 30, 2021 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.4434, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2021. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on, or September 30, 2021 at any other rate.

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