Chinese electric car maker Nio announced today that CYVN Holdings, an investment firm backed by the Abu Dhabi government and focused on advanced and smart mobility, has agreed to invest approximately $740 million in it.

Under the deal, Nio will issue about 85 million new Class A shares at $8.72 per share to CYVN.

Furthermore, CYVN has also forged a deal with a Tencent affiliate, entailing the acquisition of additional Nio shares.

Once the two agreements are completed, CYVN will own a 7% stake in Nio, giving the investment firm the right to appoint a director to Nio's board.

Nio said it will pursue global business opportunities jointly with CYVN following the closing of the investment deal.

As demand for big-ticket items remains weak, electric vehicle makers have had to slash prices to boost sales in China. Tesla kicked out a price war in China in January, and BYD, XPeng and Volkswagen had to get in on the act to prevent market share from being taken away.

Nio, which has vowed never to join the price-cutting bandwagon, saw its May deliveries fall to 6,155 vehicles from a monthly average of more than 10,000 in the first quarter.

Last week, the Chinese electric vehicle startup finally got on board, announcing a 30,000 yuan ($4,200) price cut on all models and stopping offering free battery-swapping to new buyers.

The investment from CYVN will make NIO's balance sheet healthier. The company faced a steep decline in cash and cash equivalents, from CNY19.89 billion at the end of the fourth quarter of 2022 to CNY14.76 billion ($2.15 billion) in the first three months of the year, according to its most recent earnings report.

Funds from the United Arab Emirates have been ramping up bets on Chinese tech companies this year. In March, Abu Dhabi-based artificial intelligence firm G42 bought a more than $100 million stake in ByteDance, valuing the TikTok owner at $220 billion.