China's hopes of creating its own version of Tesla are riding on a small number of electric vehicle startups, many of which rely on local government backing. © Getty Images

China's local governments ride to the rescue of EV startups

While Nio takes bailout to relocate, Xpeng and Li Auto IPOs raise billions

NIKKI SUN, Nikkei staff writer,

August 28, 2020 06:00 JST

HONG KONG -- When Chinese electric vehicle maker Nio in March told investors it might not have enough capital to survive another 12 months -- just a year after a high-profile US IPO -- many thought it would be the end of the five-year-old startup.

But after job cuts, an executive exodus, battery fire and vehicle recalls, there was one investor brave enough to step into help the lossmaking company: the municipal government of Hefei.