A year ago, Chinese electric car startups$NIO Inc. (NIO.US) $Once on the verge of bankruptcy, but now the market capitalization has exceeded$General Motors Co (GM.US) $。

NIO Inc. once missed bankruptcy and later emerged as the fourth largest carmaker in the world by market capitalization. NIO Inc. 's market capitalization is only less than$Tesla, Inc. (TSLA.US) $、$Toyota Motor Corp (TM.US) $和$ADR (VWAGY.US) $。

For years, China's electric car start-ups have promised to bring about a high-tech car revolution, but it turns out that this has not been fully realized.

Since its founding in 2014, NIO Inc. has become a leader in a group of Chinese electric car start-ups that attract investors hoping to find the next Tesla, Inc.. But as these start-ups continued to lose money and made limited progress, many investors eventually lost confidence.

As of 2019, there were 635 registered electric vehicle start-ups in China, according to the National Monitoring and Management Center for New Energy vehicles.

But very few of these companies produce finished cars, and as government subsidies and private financing dry up, most of them look doomed.

NIO Inc. 's extreme pressure Test

The company, once hailed by local media as "China's Tesla, Inc. Terminator", lost $3.67 billion and sold fewer than 32000 cars between 2017 and 2019. NIO Inc. 's share price was about $10 when it went public, but it fell to about $1 at the end of last year as investors fled.

Li Bin, founder and CEO of NIO Inc. Automobile, recalled last year's crisis in an interview, calling it an extreme stress test. The company's troubles began when the U.S.-China trade war prevented U. S. investors from participating in NIO Inc. 's IPO on the New York Stock Exchange in 2018, he said. Li Bin had hoped that IPO would raise $2 billion, but ended up raising only half that amount, disrupting his financial plans.

A subsequent costly battery recall further weighed on NIO Inc. 's financial position, as did the unexpected decline in the Chinese car market, during which electric vehicle sales fell 4 per cent in 2019.

A large number of executives left, while Shanghai-based NIO Inc. cut its global workforce by 1/4 to less than 7500. These include layoffs at the U. S. office in San Jose, California.

Mr Li says NIO Inc. entered a stage of success or failure at the end of 2019, when the company had an advantage that most other start-ups lacked: NIO Inc. was still selling cars. about 8000 cars delivered in the fourth quarter of last year created valuable cash flow of $400m.

Li Bin, 46, said this was very important to the company because they had few other sources of financing at the time.

Even so, unless NIO Inc. could find a savior, there were only weeks to go before bankruptcy, according to auto industry analysts.

Here comes the savior, that is the Hefei municipal government.

Located about 300 miles west of Shanghai, Hefei is a city in Li Bin's hometown of Anhui Province. Anhui Province has become a production center of electric vehicles. In April this year, NIO Inc. reached an agreement with the municipal government.683 million dollarsThe financing agreement.

Li Bin said the capital injection saved NIO Inc., mainly because it convinced suppliers and customers that the company still had a future.

Since then, NIO Inc. 's share price has risen all the way, rising above $57 on Nov. 25, before falling slightly. As of Friday, the company had a market capitalization of about $73.6 billion.

In addition to its own restructuring efforts, the rise in the company's share price has also benefited from Tesla, Inc.. Tesla, Inc. has promoted the development of China's electric car market since the plant in Shanghai went into production at the end of last year. Tesla, Inc. sold more than 72000 Model 3 cars made in China in the six months to October, according to the China Federation of passengers.

Led by Tesla, Inc., other electric vehicle companies have also achieved accelerated development. NIO Inc. sold more than 24000 electric cars in the six months to October, and the monthly sales exceeded 5000 for the first time in October.

About founder Li Bin

Like Musk, Li Bin is a serial entrepreneur who has founded or invested heavily in more than 40 companies. Li Bin, a native of Anhui, helped his grandparents herd cattle when he was a child. Later, he was admitted to Peking University.

Li Bin majored in sociology, but he said he was better at computer science. Li Bin co-founded his first company when he was in college, which is a bit like a data center. Li Bin founded the car-changing company in 2000, the car service portal listed on the New York Stock Exchange in 2010, and its shareholders privatized the company earlier this month.

Li Bin, who often wears a polo shirt, jeans and sneakers, is worth more than $8 billion, according to Forbes.

Where is the future of NIO Inc.?

NIO Inc., which uses contract manufacturing to produce electric cars in Hefei, plans to have a monthly supply chain capacity of 7500 vehicles from January, Li said. NIO Inc. plans to start selling electric cars in Europe next year and will eventually enter the US market, Li Bin said.

NIO Inc. 's goal is to surpass companies such as Tesla, Inc. with its power exchange service, which allows drivers of NIO Inc. 's electric cars to change their batteries in minutes without having to wait hours to recharge.

While the replacement service has the potential to solve the charging problem that makes many consumers reluctant to buy electric cars, it requires NIO Inc. to build a costly network of power stations for drivers to replace batteries. NIO Inc. Automobile has so far built 162 power stations.

NIO Inc. also allows customers to choose to buy electric vehicles without batteries, reducing the cost of NIO Inc. 's ES6 SUV from about $52200 to $41600, although consumers have to pay an additional $150 a month for battery rental. Li Bin said1/3 of NIO Inc. car buyers now choose this kind of rental option.。

There are also some institutions that do not recognize NIO Inc. cars. Citron Research, the short seller, said in early November that NIO Inc. 's share price was too high and called investor enthusiasm for Chinese electric car start-ups a "frenzy". But NIO Inc. 's share price has continued to rise since then.

Li Bin defended NIO Inc. 's high valuation relative to traditional car companies. He said that traditional car companies still produce far more cars than Weilai cars, but for traditional carmakersAn orderly mechanical culture will be difficult to adapt to an era of software-defined cars.。