China’s Tesla challenger Xpeng said to be preparing for US listing as country’s EV industry fights slowdown

Xpeng Motors, one of Tesla’s most prominent Chinese challengers, is preparing for an initial public offering in the US, according to a person familiar with the matter.

The Guangzhou-based start-up is expected to raise about US$500 million, according to media reports, although plans remain at an early stage. A company spokeswoman declined to comment on its listing plan on Tuesday.

The IPO preparation comes as competition is expected to intensify in the world’s largest electric vehicle market, after sales took a hit following a decrease in government subsidies and as the coronavirus epidemic exacerbated an economic slowdown in China.

China’s monthly car sales totalled 2.07 million units in April, up 4.4 per cent from a year earlier, according to data from the China Association of Automobile Manufacturers. However, sales of new energy cars, including battery-powered electric and plug-in hybrid vehicles, fell for a tenth straight month to 72,000 units.

While some domestic EV makers are struggling, Xpeng managed to raise US$400 million in new financing last year, according to the company. Founded in 2014, Xpeng counts IDG Capital, Alibaba Group Holding and Xiaomi among its major backers.

Last month, the company received government permission to independently assemble its electric vehicles including the soon-to-be-delivered P7 electric sports car built at its new automated plant in Zhaoqing, about 110 kilometres northwest of Guangzhou, capital of southern Guangdong province.

Alibaba is the parent company of the South China Morning Post.