China-based electric car maker Xpeng (Xiaopeng Motors) has announced plans to go public in the United States, following a slew of other EV makers keen on emulating the success of Tesla.
While Xpeng revealed in April a “Tesla killer” in the form of the P7, a long-range electric sports sedan that it started delivering in July, sales for the first half of June have been reportedly slow.
Chinese media reports that Xpeng updated its prospectus on August 21,with a proposal to issue 85 million shares of ADS (representing 170 million shares of Class A common stock) with a price range of $US11 to $US13, with plans to grant the underwriters Bank of America Securities, Credit Suisse, and JPMorgan a total of 12.75 million ADSs over-allotment rights.
Based on the mid-point price of the issuance, this puts Xpeng Motors’ IPO value at approximately $US8.613 billion.
If the IPO is successful, it will make Xpeng the third EV maker after Nio and Ideal to enter the US Nasdaq, following EV maker Nio – which has attracted investment from Tesla investor Baillie Gifford, and Ideal Automobile.
China is the world’s largest electric car market, but it is also highly competitive, and with EV subsidies withdrawn, demand for EVs has fallen, while the Tesla Model 3 has put more pressure on local players.
Still, there is considerable interest from China tech giants such as Alibaba, and Xiaomi, which Chinese media reports have confirmed an interest in the public offering.
Notably, it has been reported that there are also many new prospective subscribers, including one of Tesla’s existing shareholders, Primecap Management Company, which has reportedly indicated it will invest up to $US100 million.
Although Xpeng Motors will be only the third new Chinese car-making power to enter the US stock market, industry reporters say the time is right.
The 2018 listing of Nio in the United States saw a dip in 2019 but this has more than rectified with shares now trading at $US,14.97, 50% higher than when it first listed.
With the acceleration of the electrification of the global auto market, and the increase in Tesla’s sales and profitability, the capital market has greatly increased confidence in related companies in the new energy industry chain.
Tesla’s current stock price has exceeded $2,000 per share, and its founder Musk has also become the world’s fourth-richest man.
Rivian, another US electric pickup startup company, has not yet launched its new car, but it has received four consecutive financings within a year, and the latest financing was as high as $US2.5 billion.
After Nikola, a maker of electric and hydrogen fuel cell trucks, went public on the Nasdaq, its stock price also skyrocketed, reaching almost $US80 in June as its market value has eclipsed that of US auto mainstay Ford Motor Company.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She specialises in writing about new technology and has been writing about electric vehicles for two years. She has a keen interest in the role that zero emissions transport has to play in sustainability and is co-organiser of the Northern Rivers Electric Vehicle Forum.