Chinese EV start-ups aim at US listings, boosting competition in global race
Published: Aug 09, 2020 05:18 PM

A view of Xpeng's G3 model in an experience store in Guangzhou, capital of South China's Guangdong Province in December Photo: VCG

Chinese electric vehicle (EV) makers are rushing to go public in the US, taking advantage of rising investor interest - which has gotten a boost from US EV giant Tesla - and these Chinese start-ups are expected to compete more fiercely with various players in the world's largest EV market, analysts said.

XPeng Inc, a Chinese EV start-up based in Guangzhou, capital of South China's Guangdong Province, filed a prospectus to the US Securities and Exchange Commission on Friday to list its shares on the New York Stock Exchange even as China-US tensions continue to escalate.

The management of XPeng holds 40.9 percent of the shares, with chairman He Xiaopeng having the largest stake at 31.6 percent. Chinese tech giant Alibaba, with a 14.4-percent stake, is the largest external shareholder.

Li Auto, a Chinese EV start-up that manufactures smart electric sport utility vehicles (SUVs) in China, debuted on the NASDAQ at the end of July. Shares of Li Auto had surged nearly 50 percent as of Friday.

XPeng started production of its SUV model G3 in November 2018, and as of July 31, the company had delivered 18,741 units. The sedan model P7 began delivery in May and as of July 31, the company had delivered 1,966 units. "We plan to launch our third smart EV, a sedan, in 2021," XPeng said.

"Chinese EV start-ups' IPOs in the US market show that international investors have high awareness of new forces in the Chinese vehicle sector that design and make green and smart vehicles," Cui Dongshu, secretary general of the China Passenger Car Association, told the Global Times on Sunday.

"The world's No.1 EV giant is Tesla, but Chinese start-ups are quickly catching up and there is huge growth space. I believe exposure in the international market will help boost their competitiveness," said Cui.

NIO, Li Auto and XPeng have become new-force representatives of domestic EV makers, but they still face challenges, analysts said, as Tesla has grabbed quite a substantial market share in China and other traditional auto brands like Volkswagen and Mercedes-Benz are quickly expanding their EV offerings in China.

China is the world's largest market for these new models. Sales of pure EVs stood at 900,000 units in 2019, and the figure is forecast to surge to 4.2 million by 2025, according to IHS Markit. 

An auto industry insider surnamed Wu told the Global Times on Sunday that the IPO of XPeng marked the end of first round of EV madness, which involved many producers that merely wanted to get government subsidies instead of making a competitive product.

Wu forecast that by 2030, new energy vehicles (NEVs) will take up around 60 percent of the market and by that time, a big domestic NEV maker that can stand equal to Tesla will be born.