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Exclusive | Li Auto is mulling an overseas assembly to outgrow China’s bare-knuckle market of electric vehicles
- Li Auto has raised HK$11.8 billion in Hong Kong, the second Chinese EV maker after Xpeng to raise capital in a dual primary listing in the city
- The shares opened unchanged in their Hong Kong trading debut
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Li Auto, one of three New York-listed Chinese electric vehicle (EV) makers chasing Tesla’s market lead, said it is mulling the possibility of an offshore production base – perhaps in Europe – to be its stepping stone for the global market, as it maps out a strategy to outgrow China’s bare-knuckle EV market.
“We want to be a winner, not just a mere participant, in the global market,” Li Auto’s president and co-founder Shen Yanan said in an interview before the six-year-old EV maker’s HK$11.8 billion (US$1.52 billion) initial public offering (IPO) in Hong Kong.
“To win market share overseas, a car company has to develop the right product to attract customers with tastes” and requirements that differ from mainland Chinese users, he said. “We have set up a team dedicated to the overseas markets and we are meticulously working on the plans to find a winning formula.”
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Li Auto’s shares began trading unchanged in Hong Kong from their HK$118 offer price. The company’s American depositary receipts rose 1.1 per cent to US$30.72 overnight in New York. The company does not rule out the possibility of raising capital in mainland China’s yuan-denominated A-shares market, Shen said in Hong Kong after Li Auto’s trading debut.
The plan comes as an estimated 500 EV makers at various stages of planning and production are vying for sales in the world’s largest vehicle market, where three in every five new vehicles on China’s roads are expected to be powered by electricity by 2030, according to a UBS forecast. Deliveries of so-called new energy vehicles jumped 12 per cent to 1.17 million units in 2020, nearly half of the global total.
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Li Auto’s Hong Kong IPO adds to the US$1.1 billion war chest it assembled from its New York IPO in July 2020, giving it the financial resources to develop new models and expand production capacity.
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