Explainer | China EV war: Top 5 electric vehicle fundraisers to watch out for in 2021
- WM Motor, Leapmotor and Aiways plan IPOs in Shanghai as they fight for market share in the world’s largest electric vehicle market
- Hong Kong-listed Geely and China Evergrande New Energy Vehicle Group plan A-share sales
China’s fundraising boom for electric cars looks set to continue through the Year of the Ox as the capital-intensive industry ploughs billions of dollars into new models, marketing and infrastructure across the world’s largest car market.
The single largest investment by the auto industry in a century is well under way, as electric vehicle - known as new-energy vehicles (NEV) in China - start-ups ramp up production, while traditional carmakers such as Geely and Great Wall Motors switch to making EVs from petroleum-fuelled internal combustion engines.
The fundraising boom via special purpose vehicles, better known as SPACs, for new entrants is gathering momentum, said stock analysts. Lucid Motors is nearing a deal to go public via a SPAC, according to Bloomberg. Some incumbent players are attempting their own capital raises or monetisation efforts by ring-fencing or spinning out EV assets.
Investors tend to see the new EV companies as having a greater growth potential but think the incumbents can lean on already meaningful earnings.
WM Motor Technology
Founded in 2015 by Freeman Shen Hui, the company has a manufacturing facility in Wenzhou, in China’s eastern Zhejiang province, equipped with mass customisation capability and a capacity of 100,000 units a year. Another manufacturing facility is under construction in Huanggang, in Hubei province.
Aiways
The Chinese electric vehicle maker is also looking to make its debut on the Star Market, according to a person familiar with its plans.
Shanghai-based Aiways was founded in 2017 by the Chinese entrepreneurs Samuel Fu and Gary Gu. The company has a plant in Shangrao with an annual capacity of 300,000 vehicles, a research and development centre and a design centre in Shanghai, a battery factory in Changshu and a European sales centre in Munich.
The Aiways U5 SUV model has a range of up to 503 kilometre on a single charge, according to New European Driving Cycle data. The company did not respond to a request for additional information.
Geely Automobile Holdings
The Zhejiang-based carmaker, the owner of Volvo Cars and the largest shareholder in Daimler, has joined the crowd of traditional carmakers seeking to redefine themselves as technology players. Geely has plans to make 10 electric cars by 2025.
As part of the company’s transformation, Geely formed alliances with Baidu, Tencent and Foxconn as it seeks to secure its position as one of the leading players in the future of transport.
China Evergrande New Energy Vehicle Group
The Hong Kong-listed company is controlled by China’s third-richest tycoon Hui Ka-yan who plans to ramp up capacity at the firm’s plants in Shanghai and Guangzhou to between 500,000 and 1 million vehicles within three to five years.
Late January, the firm sold 952.4 million shares at HK$27.30 each to six private investors, raising HK$26 billion. Some of the richest Hong Kong and mainland tycoons subscribed to the share sale, including Chan Hoi-wan of developer Chinese Estate Holdings and Liu Ming-hui, the founder of China Gas Holdings.
Before that, it sold 176.6 million of new shares in September in a top-up placing for HK$3.98 billion.
The stock has risen 1,000 per cent to HK$69 since June 1.
Leapmotor
Leapmotor is also planning an IPO on the Star Market, according to local media reports.
Leapmotor was founded in December 2015 by Zhu Jiangming and Fu Liquan. The Hangzhou-based company raised 4.3 billion yuan in a Series B funding round in January, according to Crunchbase. In 2018, it raised seed capital from private equity fund Sequoia Capital China.
The company has three EV models, the T03, S01 and most recently, the C11. The company did not respond to a request for additional information.
Additional reporting by Daniel Ren
