(Bloomberg) -- Nio Inc. is considering raising around $3 billion from investors, according to people familiar with the matter, as questions swirl around the Chinese electric-car maker’s health amid mounting losses.

Shanghai-based Nio has approached investors from the Middle East, the people said, asking not to be identified discussing matters that are private. The fundraising could happen as soon as next year, one of the people said.

Nio said in a statement that it “currently has no reportable capital raising activity,” aside from the $1 billion convertible notes offering the company announced completing earlier Monday. In June, Nio raised around $738 million from a share sale to Abu Dhabi’s CYVN Holdings LLC.

Nio’s American depositary receipts fell as much as 7% shortly after the start of US trading and were down 2.7% as of 9:55 a.m. in New York.

Read more: Nio Has Been at the Brink Before. Can the EV Maker Rally Again?

The current talks are ongoing and details are subject to change, the people said. There’s no certainty Nio will proceed with the fundraising, they added.

Founded in 2014, Nio has yet to turn a profit and is burning through cash. The company posted a larger-than-estimated loss of more than $800 million last quarter, and its market capitalization has slumped over 50% from a year ago to about $14 billion.

Targeting middle-class consumers and early EV adopters in the world’s largest market, Nio has invested heavily in splashy showrooms, battery and charging infrastructure and research and development.

Read more: Chinese EV Maker Nio Reports Quarterly Loss, Slimmer Margin

Nio’s gross margin dropped to as low as 1% in the second quarter as it cut prices to endure an intense price war in China ignited by rival Tesla Inc.

Even with a recent rebound in monthly deliveries, Nio shipped just 94,352 vehicles in the first eight months of 2023 — less than half its annual target of 250,000.

Founder and Chief Executive Officer William Li admitted in June that Nio had been forced to delay some investment and be more cautious on its overseas expansion. Even so, the company last week launched a smartphone that can sync with its cars.

Nio is betting that short-term investments in R&D will result in a gross margin longer term of around 20%, Li said at a recent media event. He added that he expects gross margin to bounce back to double digits in the third quarter, helped by a decrease in the price of lithium, a key raw material in EV batteries.

(Updates with company statement in the third paragraph.)

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