Chinese electric car maker Xpeng to follow August NYSE debut by raising additional US$2.48 billion
- Company says it will price 48 million American depositary shares at US$45 each
- Placement will be the largest first-time follow-on ADS offering by a Chinese company in New York
Guangzhou-based new energy vehicle (NEV) maker Xpeng Motors said on Wednesday that it could raise up to US$2.48 billion in a follow-on share placement. It debuted on the New York Stock Exchange in August after netting US$1.5 billion in an initial public offering (IPO).
Xpeng could raise the US$2.48 billion if it exercises an option to sell an additional 7.2 million ADSs. The placement will be the largest first-time follow-on ADS offering by a Chinese company in New York, in any case.
“The Chinese Tesla challengers, after having raised additional funds, will be better placed to enhance their research and development capabilities, and to improve their marketing strategies, as they pursue a bigger market share,” said Yin Ran, a Shanghai-based angel and venture capital investor. “They are now viewed as rising stars on the stock market, with investors taking a bullish stance on their growth prospects.”
Xpeng’s placement followed an announcement by Li Auto, which last week said it would raise as much as US$1.6 billion by issuing 47 million ADSs on the New York Stock Exchange.
Xpeng too briefly surpassed Ford in value last month, after its share price soared 203 per cent. At US$45 per share, six-year-old Xpeng would be valued at US$34.18 billion, almost the same market capitalisation as Ford.
Inside Chinese electric vehicle maker Xpeng's factory in Zhaoqing city
None of these NEV makers have made a profit yet. Analysts said that they needed to make cars that would meet mainland drivers’ expectations but at lower costs, to gain an edge over Tesla and its locally made Model 3.
In October, Tesla cut the starting price of the Model 3 by 8 per cent to 249,900 yuan (US$38,250). Nio’s seven-seat ES8 flagship, however, starts from 407,500 yuan after a government subsidy. Xpeng’s P7 starts from 229,000 yuan after subsidy.
Nio this month raised production at its joint-venture factory in Anhui province by 50 per cent. Thirty all-electric ES6 five-seater sports utility vehicles (SUVs) and the bigger ES8 premium SUVs roll off the production line at this factory every hour. The carmaker is on track to produce 120,000 electric cars a year.
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Xpeng is revving up its brand-new factory in Guangdong province to produce 150,000 vehicles a year. Brian Gu, its president, said in an interview last month that it would focus on designing and manufacturing cars for mainland drivers.