(Bloomberg) -- A bet by Baillie Gifford, the largest investor in Tesla Inc. after Elon Musk, that the rise of electric vehicles is close to inevitable is going haywire.
The Edinburgh-based fund manager spent about $670 million to buy more than 100 million shares of NIO Inc., a Chinese electric-vehicle maker, in late 2018 and early 2019, according to data compiled by Bloomberg. The value of its stake was worth about $198 million during intrady trading Monday in New York, representing a loss of $432 million when factoring in the value of shares sold, and assuming Baillie Gifford holds the same number of shares Tuesday as it did at the end of the second quarter.
A $410 million loss would be roughly half what Baillie Gifford has reaped on its more famous EV bet. The fund has reaped about $624 million from its Tesla investment since it first purchased shares in 2013, when they traded around $36.
NIO reported a worse-than-expected quarterly loss Tuesday, prompting it to pursue thousands of job cuts by the end of this month and to spin off some businesses by year-end. Prospects for China's EV market have dimmed in recent months as the government has scaled back subsidies.
Those concerns may also be spilling over to drag down shares of Tesla, which is building a factory near Shanghai. That stock plunged as much as 7.7% Tuesday, the biggest drop in almost six weeks.
Nick Thomas, a Baillie Gifford partner, said in an email the firm prefers not to comment on short-term news flow.
To contact the reporter on this story: Brandon Kochkodin in New York at bkochkodin@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson
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