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It is reported that GAC GROUP plans to buy a stake in Lulai Motors. At present, GAC GROUP is raising funds for investing in Lulai Motors. The amount of money is about $1 billion, according to people familiar with the matter. In response to this news, NIO said that the financing project shall be subject to the announcement of listed companies.

Admittedly, as a new force in car-building, Lai Automobile is indeed plagued by funds. If GAC GROUP takes a stake in Lai Automobile, it will effectively alleviate the financial problems of Lai Automobile. From the current point of view, Xilai Automobile in terms of capital is mainly through cost-cutting and financing.

In July 2019, Xilai sold its Formula FE fleet in order to ease financial pressure. At the same time, the company announced layoffs at the end of the third quarter and the end of 2019, bringing the number of employees to about 7500.

On the other hand, in May 2019, Beijing Yizhuang Guotou signed an agreement that Yizhuang Guotou will invest 10 billion yuan in Yilai Automobile, while Yizhuang will build a new factory in Beijing Economic Development Zone to produce second-generation platform models. But so far, no real progress has been made between Lai Motor and Beijing Yizhuang Investment Co., Ltd.

In October 2019, Lai Motor negotiated a financing intention of more than 5 billion yuan with Wuxing District, Huzhou City, Zhejiang Province, and will build a factory with an annual production capacity of 200000 vehicles in Wuxing District. However, due to the high risk of the project, Xilai Motor failed to reach a financing agreement with Wuxing District.

According to the financial report of Xilai Automobile, its operating income in the third quarter was 1.8368 billion yuan, an increase of 25.0% over the same period last year, but the net loss reached 2.451 billion yuan. In the earnings call, NIO said that at present, in terms of funds, the 200 million US dollars of convertible bonds previously announced by NIO from Tencent and Li Bin have been nearly completed.

In fact, Lulai Motor has always kept in touch with GAC GROUP, and GAC GROUP can also be regarded as an important partner of Lulai Automobile. As early as April 2018, GAC established a joint venture with Xilai-Guangzhou Automobile Ulay New Energy Automotive Technology Co., Ltd. In December 2019, Guangzhou Auto NIO's first pure electric SUV-HYCAN 007 was officially unveiled with a pre-price range of 26-400000 yuan and a comprehensive mileage of 643km.

GAC GROUP's stake in NIO Automobile will effectively alleviate the financial pressure of NIO, improve operation and reduce costs. However, if GAC shares in Wei come, GAC may become the largest shareholder, what should Li Bin think?

At present, there are two production models, ES8 and ES6, of which ES6 accounts for 80 per cent of the total delivery volume. In addition, the SUV EC6, the third production car, will also be delivered in September this year.

After the news that GAC might take a stake in Lvlai, it rose 12.50% to US $4.23 before closing at US $3.76, or 1.62%.

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