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By Zheng Lichun, Zhao Runhua and Han Wei / May 29, 2019 02:55 AM / Business & Tech

Photo: VCG

Photo: VCG

China’s electric-car startup Nio Inc. announced a new venture with a 10 billion yuan ($1.45 billion) investment from a state-backed investor as the company reported first-quarter results Tuesday.

New York-listed Nio said it will form a joint venture with Beijing E-Town International Investment and Development Co. Ltd. in the Beijing Economic-Technological Development Area on the southern edge of the city. Beijing E-Town will support Nio in building a new manufacturing facility for its next-generation platform 2.0 vehicles, which are set to hit the market around 2021, Nio said. The company added that the parties are still in talks to work out a final binding definitive agreement on the investment.

Nio’s vehicles are currently produced in partnership with state-owned JAC Motors in Anhui province capital Hefei. The company in March abandoned a plan to build a factory in Shanghai because of competition from Tesla Inc.

Nio on Tuesday reported a smaller-than-expected loss for the first quarter. The company’s adjusted net loss was $373 million for the first quarter, 25.5% narrower than in the previous quarter and lower than the $472 million loss that was expected.

The company’s total revenue for the quarter dropped more than 50% from the previous quarter to $243.1 million. Nio sold 3,989 vehicles during the first three months, a drop of 50% from the previous quarter.

An increase in research and general expenses was expected to make it harder for the company to profit, but Nio actually narrowed costs and losses during the period.

The company attributed declines in key performance figures to factors including the phasing out of EV subsidies, ongoing trade tensions, the Chinese car industry’s slowing and intensifying competition.

Related: EV Explosions Spark Safety Concerns

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