Chinese Electric-Car Maker Roars in IPO -- WSJ
August 28 2020 - 3:02AM
Dow Jones News
By P.R. Venkat and Trefor Moss
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 28, 2020).
Xpeng Inc., one of Tesla Inc.'s Chinese rivals, raised $1.5
billion through an initial public offering in the U.S., more than
initially planned, because of high investor demand.
Xpeng sold 99.73 million American depositary shares at an offer
price of $15 Thursday. That was more than the 85 million shares
that were previously planned, and the offer price was higher than
the initial guidance of $11-$13.
On the first day of trading the shares leaped 41% to $21.22.
They trade on the New York Stock Exchange under the symbol
XPEV.
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
more than $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 about $20.
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 in 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 -- an
SUV -- and starting production of a new sedan at its own plant in
the southern city of Zhaoqing in May.
Credit Suisse, J.P. Morgan and BofA Securities are among the
banks that advised 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 28, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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