By Carlo Versano
Shares of the newly-public Chinese electric car company NIO surged for a second straight day Wednesday ー even amid a broader market slump ー on the news that Tesla's largest outside investor is taking a stake.
NIO ($NIO) was up as much as 5 percent on Wednesday morning, following an SEC disclosure that Baillie Gifford, an investment firm that owns 9 perfect of Tesla ($TSLA), is acquiring around 11 percent of NIO.
The investment shows that we're still in the early stages of a match to own the exploding market for luxury electric vehicles, and deep-pocketed investors seem willing to back more than one horse at a time.
"We're in uncharted territory now," said Tamara Warren, co-host of Cheddar Rides.
But NIO isn't Tesla.
Despite its troubles, Elon Musk's company has a soup-to-nuts production component.
NIO, on the other hand, doesn't actually make its own vehicles, as Warren noted. Instead, it has an agreement with a Chinese manufacturer. So while NIO proclaims itself to be a Tesla rival, "no one knows who's going to give Tesla run for their money," Warren said.
NIO raised $1 billion in a public offering last month on the NYSE, though it stumbled out of the gate. After more than doubling in its first few days on the market, shares feel back below their IPO price. With Wednesday's gains, the stock is at its highest level since Sept. 25.