Electric car companies need large investments to scale up production and develop new models. Chinese manufacturers are no exception, so Xpeng Motors is looking to raise $1 billion to $2 billion in an offering on the Hong Kong Stock Exchange.
This was reported to CNBC by sources familiar with the plans of the Chinese electric car manufacturer. This step is unusual for the fact that Xpeng Motors shares are already traded on the stock exchange in New York, but the company intends to float in Hong Kong using a double approval procedure – with regulators in both Hong Kong and the United States. Such a scheme would theoretically open the way for Xpeng Motors shares to investors in mainland China, which is becoming the world’s largest electric car market. In fact, Xpeng Motors itself is registered in Guangzhou, so it was only a matter of time before it raised funds from investors in China.
Many Chinese companies have tried to enter local trading floors over the past year, fearing delisting in the U.S. under pressure from President Trump’s administration. U.S. authorities are ordering Chinese companies whose shares are traded on the U.S. market to bring their auditing standards into line with those in U.S. jurisdictions within three years. It is not possible for many Chinese companies because of contradictions in the legislation of the two countries; therefore they started to prepare the ground for leaving the American stock market in advance.
Xpeng Motors’ main competitors, Nio and Li Auto, have also floated their shares in the United States. Xpeng managed to increase its electric car shipments to 5,686 units in May, with the company hoping to ship as many as 16,000 electric cars in total by the end of the second quarter. April saw the introduction of the brand’s second electric sedan, the Xpeng P5. The range of models reaches three pieces if the Xpeng G3 crossover is included. The company pays special attention to automation of the driving process, the flagship Xpeng P7 model is capable of driving in automatic mode not only in urban areas, but also on highways.