Chinese EV Maker XPeng Seeks to Raise $1.1 Billion in U.S. IPO
China is the world’s largest EV market, but also highly competitive. As public subsidies have been withdrawn, demand has fallen. A Tesla offensive to make cars locally has heaped more pressure on local players. Chinese electric-car startup Xpeng Motors is seeking in its U.S. initial public offering to raise $1.1 billion, slightly topping last month’s listing by rival Li Auto Inc.
Chinese electric-car startup Xpeng Motors is seeking in its U.S. initial public offering to raise $1.1 billion, slightly topping last month’s listing by rival Li Auto Inc.
XPeng Inc., in a filing on August 21, 2020 with the U.S. Securities and Exchange Commission, said it planned to sell 85 million American depositary shares for $11 to $13 each. Based on the shares listed in the filing, the company would have a market value of about $9.17 billion at the top of that range.
Electric-vehicle makers have been enjoying a surge in investor interest after strong share price gains this year by Tesla Inc. and NIO Inc. Li Auto, which increased the size of its U.S. IPO, has since climbed 32% from its offer price.
Guangzhou-based XPeng closed its latest funding round for a total of $900 million, according to its filings. The Qatar Investment Authority put in $100 million while Abu Dhabi’s Mubadala invested another $100 million, the company said in the prospectus. Alibaba Group Holding Ltd. also contributed $215 million, boosting its investment in XPeng.
China, World-largest and Highly Competitive EV Market
China is the world’s largest EV market, but also highly competitive. As public subsidies have been withdrawn, demand has fallen. A Tesla offensive to make cars locally has heaped more pressure on local players.
After years of developing cars and trying to boost their profiles globally, Chinese EV makers are now taking steps to go public as the virus pandemic and economic slowdown squeeze the market, boosting competition. Hozon New Energy Automobile Co. has said it would list in Shanghai as soon as next year. WM Motor Technology Co. is also weighing an initial stock sale in China as soon as this year, people familiar with the matter have said.
About XPeng Motors
XPeng has delivered 18,741 of its first vehicle, the G3 SUV, through July 31, according to the company’s filing. It started deliveries of its second model, the P7 sedan, in May, shipping 1,966 units by July 31, according to its filings.
For the six months ended June 30, XPeng said it had a net loss of $113 million on revenue of $142 million.
The depositary shares will be worth two ordinary Class A shares. The company’s voting power will be controlled by holders of Class B and Class C shares, which will carry 10 and five votes each, respectively.
About E. J. McKay
E.J. McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.