Chinese carmaker SAIC to spin off hydrogen fuel cell unit, eyes Star Market IPO

SAIC Motor, China’s largest home-grown carmaker, plans to spin off a unit focusing on hydrogen fuel cell technologies, and list it on a stock exchange to rev up its diversification into alternative fuel vehicles.

Zu Sijie, SAIC’s vice-president, said Shanghai Hydrogen Propulsion Technology (SHPT) would give priority to the Shanghai Stock Exchange’s Nasdaq-style Star Market when making its initial public offering (IPO) plans, according to financial magazine Caijing.

He did not provide further details, but two sources with the company said that SAIC had been actively looking to raise capital to support the growth of SHPT. The company and parent firm SAIC could not be reached for comment on Friday.

“Hydrogen fuel cell is one of those technologies that powerful car companies have to grasp, to compete in the automotive market in the future,” said Eric Han, a senior manager with Shanghai-based business advisory firm Suolei. “But capital is much needed to support the development of fuel cell related technologies.”

SHPT, which is fully owned by SAIC, was established by the Shanghainese state-owned carmaker in 2018 amid efforts by China to widen the use of hydrogen-powered vehicles to reduce pollution. Beijing is encouraging the development and use of fuel cell vehicles, along with pure electric battery-powered vehicles and plug-in hybrid cars, as these new energy sources are a cleaner alternative to internal combustion engines.

Last September, Chinese President Xi Jinping told the United Nations General Assembly that China would aim to be carbon-neutral by 2060.