A Middle Eastern sovereign fund has doubled its investment in the same Chinese car company twice this year. On December 18, NIO officially announced that it received a $2.2 billion strategic financing from ABU Dhabi investment agency CYVN Holdings (hereinafter referred to as "CYVN"). This is CYVN's second investment in NIO this year. In July this year, CYVN completed a strategic investment of about $1.1 billion in NIO through a private placement of new shares and the transfer of old shares, and in addition to buying shares from Tencent, it also obtained a 7% stake in NIO.
This is not the first recent move by Middle Eastern capital. Since the beginning of this year, a number of car companies such as Xiling Power, BAIC New Energy, Evergrande Automobile, Great Wall Huaguan, and Geely Automobile have received investment from Middle East capital. Vice president of the Investment banking Department of Dubai National Bank of the United Arab Emirates said that energy transformation is an imminent task for Middle Eastern countries, China has advanced electric vehicle production and manufacturing technology and a huge consumer market, whether it is direct investment or attracting joint ventures, it is conducive to the Middle East fund to share the dividend of the development of the Chinese market.
According to public information, CYVN is an investment institution majority-owned by the ABU Dhabi government of the United Arab Emirates, and its investors include the ABU Dhabi Investment Authority, Mubadala Investment Company, National Oil Investment Company, ABU Dhabi National Oil Company and other institutions. Its main operator is the ABU Dhabi Investment Authority, the world's third largest sovereign fund by assets, which increased its investment in the Chinese market from 4.5% at the end of 2019 to 22.9% in the first quarter of 2023. CYVN's layout strategy focuses on the smart mobility industry. Established in 2022, the fund is committed to investing in global industry leaders in the sector, reflecting the vision of the ABU Dhabi government as it seeks to diversify its economy.
Under this vision, CYVN actively carried out the layout of new energy electric vehicles. As early as December 2022, CYVN invested $915 million in Lucid Motors, an American electric vehicle manufacturer, and was promoted to the largest shareholder with a stake of 7%. In January 2023, CYVN invested $400 million in Xopeng Automobile; In the same month, CYVN invested $150 million in British electric car maker Arrival, taking a 3.1% stake in the company. It can be seen that the main way for CYVN to invest in new energy vehicle companies is to subscribe shares. This year, there are also a number of Chinese new energy vehicle companies and Middle East capital strategic cooperation. In October, BeyonCa (Binli Automotive) signed a memorandum of investment and strategic cooperation with Al Faisaliah Group Holding Company (AFG), an investment group based in Saudi Arabia. In September, autonomous driving solutions provider Hongjing Intelligent Drive received investment from Prosperity 7 Ventures, the VC arm of Saudi Aramco.
It can be said that the Middle East capital to increase the size of China's electric vehicle industry will achieve a win-win situation. Energy transformation is an urgent task for the Middle East countries to get rid of the single dependence of the economy on oil. China has advanced electric vehicle production and manufacturing technology and a huge consumer market, whether it is direct investment or attracting joint ventures, it is conducive to the Middle East fund to share the dividend of the development of the Chinese market.
As early as 2016, Saudi Arabia launched the "Vision 2030 Economic Plan", which aims to increase the proportion of renewable energy generation to 50% by 2030. In 2017, the UAE put forward the "Energy Strategy 2050", aiming that by 2050, the UAE's energy mix will be 44% renewable energy, 38% natural gas, 12% clean fossil energy and 6% nuclear energy. In 2021, Saudi Arabia released a five-year strategy for the Public Investment Fund, intended to accelerate the realization of the "Vision 2030 plan."
In recent years, with the strong "banknote ability", the Middle East gold owners have become more and more powerful in the Chinese capital market. Heavy position in China, investment in the Chinese market, has become one of the focus of the Middle East capital layout. Such frequent "sweeping" reflects, in a sense, the importance of new energy in the Middle East. In the future, when the new energy revolution comes, the Middle East capital through equity investment, joint management and other forms, on the one hand, can obtain rich financial returns, on the other hand, from the growth of these Chinese science and technology enterprises, the introduction of new energy vehicle technology to the country, accelerate the local industrial transformation and upgrading, this account is not lost.
