Chinese Tesla competitor Nio sinks after larger-than-expected share sale

• Nio announced on Monday that it sold 88.5 million American depository shares for $17 a piece.
• Shares of Nio slumped 8% in premarket trading Monday.
• The Chinese electric vehicle company, which competes with Tesla, originally planned to sell 75 million shares in a secondary offering
• Watch Nio trade live on Markets Insider.
• Read more on Business Insider.

Shares of Nio slumped as much as 8% in premarket trading Monday after the Chinese electric vehicle company announced a larger secondary offering than expected.

Nio, which competes with automakers such as Tesla and Nikola, announced Monday that it sold 88.5 million American depository shares for $17 a piece, raising roughly $1.5 billion.

The company plans to use the proceeds from the offering "to increase the share capital of and the Company's ownership in NIO China, to repurchase equity interests held by certain minority shareholders of NIO China, and for research and development in autonomous driving technologies, global market development and general corporate purposes," it said in a statement.

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The secondary offering was larger than expected. Last week, Nio announced that it intended to sell 75 million ADSs in the offering. The boosted offering comes amid a global frenzy for electric vehicle companies — this year, Tesla shares have skyrocketed.

Nio has surged as much as 360% year-to-date through Friday's close.

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