Chinese Tesla Rival to Raise $1.5 Billion in U.S. IPO -- Update
August 27 2020 - 05:24AM
Dow Jones News
By P.R. Venkat and Trefor Moss
Xpeng Inc., one of Tesla Inc.'s Chinese rivals, will raise $1.5
billion through an initial public offering in the U.S., more than
initially planned, because of high investor demand.
Xpeng will sell 99.73 million American depositary shares at an
offer price of $15, the company said Thursday. That is more than
the 85 million shares that were previously planned, and the offer
price is higher than the initial guidance of $11SHY-$13.
The electric car maker joins the more than 20 Chinese technology
companies to tap the U.S. market this year by listing on the Nasdaq
Stock Market or the New York Stock Exchange and raising a total of
over $6 billion, according to Dealogic data.
China's electric-vehicle startups, which faced declining sales
last year while collectively incurring billions of dollars of
losses, are resurgent.
The turning point came, according to auto analysts, when Nio,
the highest-profile Chinese EV startup, secured nearly $1 billion
in funding from several state-owned companies in the eastern city
of Hefei, allaying fears about the company's solvency.
Since then Nio's New York-listed shares have rallied from under
$3 to nearly $18.
Tesla's strong performance in China has also buoyed investors,
said Bill Russo, the founder of Shanghai-based consulting firm
Automobility. Just as the Apple iPhone seeded the Chinese
smartphone market and enabled the rise of local players such as
Huawei Technologies Co. and Xiaomi Corp., investors and local EV
makers are banking on Tesla filling the same role China's EV
sector, he said.
Tesla's China sales took off after its Shanghai plant started
delivering Model 3 sedans in December, helping convince wavering
investors that electric cars remain the automotive industry's
future.
Xpeng, which produces the P7 sports sedan and the G3 SUV, sold
4,696 vehicles in the first half of 2020, according to LMC
Automotive, lagging behind its startup peer Nio, which had sold
14,781 during the same period.
Li Auto sold 9,500 units, while Tesla outsold all of them
combined, selling 48,384 vehicles.
While Tesla builds its own cars in Shanghai, Nio employs a local
state-run auto maker to manufacture its vehicles.
Xpeng does both, outsourcing production of its first model, a
sport-utility vehicle, and starting production of a new sedan at
its own plant in the southern city of Zhaoqing in May.
Xpeng said Thursday that underwriters have the option to sell an
additional 14.96 million ADS under a green-shoe option.
Shares of the company are expected to begin trading on Thursday
on the NYSE under the symbol "XPEV."
Credit Suisse, J.P. Morgan and BofA Securities are among the
banks advising on the offering.
Jing Yang contributed to this article.
Write to P.R. Venkat at venkat.pr@wsj.com and Trefor Moss at
Trefor.Moss@wsj.com
(END) Dow Jones Newswires
August 27, 2020 05:09 ET (09:09 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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