Rival Tesla Nio receives a $2.2 billion investment from an Abu Dhabi firm.

Investment vehicle for the UAE As Beijing's relations with Middle Eastern entities strengthen, CYVN acquires a 20% share in a Chinese firm.Use the sharing options by clicking the share icon on the side or top of each article. FT.com's terms and conditions and copyright policy are broken when articles are copied for distribution. Send an email to licensing@ft.com to purchase more rights. With the gift article service, subscribers may share up to 10 or 20 articles each month. You may find out more at https://www.ft.com/tour.The content of this page is 121e662c-a4c6-45eb-82c3-ae348a302971.As Middle Eastern organizations and Beijing increasingly collaborate in the clean tech transition, Tesla competitor Nio has obtained a $2.2 billion investment from Abu Dhabi-backed CYVN Holdings.

The agreement, which comes after CYVN invested more than $1 billion in Nio in July, will give the UAE investment vehicle 20% of the Chinese group's shares and is meant to allay concerns about the loss-making company's finances held by certain analysts.

As Beijing intensifies its challenge to Washington's supremacy in the area, there is a rising trend of closer business links between the Middle East and China, the largest automobile market in the world.

Nio went public on the Nasdaq market in New York in 2018, but since then, it has suffered from significant financial losses, manufacturing issues, and exorbitant deployment costs for its battery swapping system, the technology at the core of its business strategy, as well as opulent showrooms.

It takes around five minutes to change the car's battery via a hatch in the floor by unscrewing the bottom of the vehicle.

Nio thinks the technology, which may be marketed to other organizations, provides a means of allaying customer concerns over the longevity of batteries and the length of time it takes for an EV to charge.

Nio has been negatively impacted by price reductions as the competition for market share heats up, despite a healthy year-end for China's EV sector.

The CYVN infusion occurs a few days after president and co-founder Lihong Qin said that it was becoming more difficult to borrow capital due to rising interest rates.

He said last week, "We are looking for new investors, and financing is one of our daily jobs." "It never stops; the current state of global financial policy has only increased the difficulty of this work."

Nio, he said, "had not become profitable yet" and was now losing almost $12,000 on each vehicle that was sold.

He emphasized, "We certainly face many challenges, but we do not have concerns for our short-term survival."

With intentions to provide a more affordable brand in the area by 2025, the firm is growing among a number of Chinese car conglomerates operating in Europe.

However, Qin noted that the company has also postponed its intentions to join the US market due to the "urgency of profitability," taxes, and the expense of vehicle certification.

Since European auto laws are much more similar to those in China, Nio will concentrate its exports there since it will be less expensive to modify its cars there for the market.

Additionally, it has partnered with Chang'an and Geely in China to collaborate on battery switching.

Analysts have said that without significant collaborations to increase the system's attractiveness, it would be difficult for the firm to make battery switching a viable technology.

For the first time, plug-in hybrid and pure battery vehicle sales in China exceeded one million units per month in November, according to figures provided by Shanghai consultant Automobility.

China surpassed both the US and Europe in the first 11 months of this year, producing 8.3 million EVs, with pure battery EVs reaching 5.9 million and plug-in hybrids reaching 2.4 million.