Regulatory filings revealed on Tuesday that the largest outside investor in Tesla, Baillie Gifford & Co, has taken an 11.44% stake in newly listed NIO Inc., a company that aspires to be a direct rival to Tesla in China.
Baillie Gifford & Co disclosed that they own ~85.3 million shares of the Shanghai-based company. As of the end of day on Tuesday, that stake was worth about $500 million. NIO recently raised about $1 billion during its IPO last month and has its United States headquarters in San Jose, California just about 17 miles from Tesla's Fremont factory.
Right now, NIO is working on ramping up production of its first commercial product: the ES8 sport utility vehicle.
Baille Gifford owns 7.7% of Tesla, the second largest stake only to CEO Elon Musk's stake. At the close of the market on Tuesday, this stake was worth about $3.5 billion.
As a reminder, James Anderson, a Gifford fund manager, had sent a letter to Elon Musk back in July letting him know that he was not happy about Musk's his Tweets about cave diver Vern Unsworth, who Musk labeled as a "pedo".
Then, in September of this year, it was reported that Gifford had been questioned by the SEC about Musk's "funding secured" tweet fiasco.
“[Musk] needs help, and I mean that psychologically as much as practically,” Anderson told the Globe and Mail last month.
Perhaps Gifford has grown tired of all of the extra work that comes with being a Tesla shareholder. So far, there has been no indication that they have sold any of their Tesla stake.
“We are very supportive, but we would like peace and execution at this stage. It would be good to just concentrate on the core task,” Anderson told Bloomberg back in July - about 2 months before Elon Musk was sued by the SEC for securities fraud.
And so while the move could be for diversification purposes, it certainly became a stark reminder on Tuesday that there are other options out there for those who want to sink money into electric vehicles. We’re guessing as Elon Musk’s behavior continues to become more and more erratic, these "other options" will only start to look more and more attractive.