SHANGHAI—A year ago, Chinese electric-vehicle startup NIO Inc. was near ruin. Today it is worth more than General Motors Co.
NIO’s brush with bankruptcy and its subsequent revival to become the world’s fourth most valuable auto maker—only Tesla Inc., Toyota Motor Corp. and Volkswagen AG are worth more by market capitalization—is a measure of investors’ seesawing faith in Chinese EV startups, which for years promised a high-tech automotive revolution that proved elusive.
From its founding in 2014, NIO led a pack of Chinese EV startups that became a magnet for investors seeking the next Tesla. But many investors eventually lost confidence, frustrated by the loss-making companies’ limited progress.
By 2019 China had 635 EV startups on paper, according to the government-backed NEV State Monitoring Center. Few had produced a single car and most looked doomed as government subsidies and private financing evaporated.
NIO’s demise looked set to be the most spectacular of all.
