Tesla's Challenger NIO Inc., China automobile manufacturer Gwangzhou Automobile Group Co. The company said it was looking for financing and strategic opportunities with the company, but talks are still in the early stages.

Earlier, the news website Sina Finance reported that it was negotiating with Guangzhou Automobile for up to $ 1 billion, sending US listed shares of the electric car maker to nearly 17% of heavy trading.

Electric car manufacturers are struggling with uncertain demand in China's largest car market, as some companies withdraw subsidies on new fuel vehicles amid criticism of excessive reliance on funds.

On December 12, Neo issued its quarterly report warning that there was insufficient cash to continue operations over the next 12 months and that it was seeking external financing.

American-listed shares of the electric-car maker rose 17% in afternoon trading to 40 4.40.
Neo said the New York Stock Exchange has approached its U.S. depository shares after exceptional market activity.

Guangzhou Automobile (GAC Group) operates in about 18 markets worldwide and sold more than 2.1 million cars in 2018, in partnership with automakers Honda Motor Company Limited, Toyota Motor Corp and Mitsubishi Corp.

The Guangzhou-based automaker plans to operate in the U.S. market from 2017, but closed its plans indefinitely in May last year amid rising tensions between Washington and Beijing.