Abu Dhabi will acquire a 7% stake in the Nio electric vehicle company in China.

In exchange for a board seat and a 7% interest in Nio Inc., the government of Abu Dhabi is providing the electric vehicle manufacturer with additional funding as it struggles with losses and erratic demand in China’s competitive EV market.

According to a statement released on Tuesday, CYVN Holdings LLC, an investment company under the ownership of Abu Dhabi, has agreed to purchase around 85 million freshly issued Class A shares for $738.5 million in cash, or $8.72 per share. To reach the 7% stake, CYVN is purchasing an additional 40 million shares from Chinese internet behemoth Tencent Holdings Ltd.

Shanghai-based As shipments declined, Nio last month reported a worse-than-anticipated net loss for the first quarter, raising worries that the company is losing ground in the fiercely competitive Chinese auto market. In response, Nio CEO William Li slashed pricing on all of the company’s models in China and postponed a plan to break even by the end of the year.

The CEO stated last week that he is still «confident» Nio can produce more than 20,000 automobiles each month in the second part of the year. This year, the corporation wants to sell 250,000 electric vehicles, which would be a 100% increase.