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Chinese Automaker Lixiang Automotive Has Filed for a Confidential U.S. IPO, Sources Say

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【Summary】​Electric carmaker Lixiang Automotive has filed for a confidential U.S. IPO this week and is making plans to become the second Chinese automaker behind NIO to launch an IPO in the U.S.

FutureCar Staff    Jan 03, 2020 2:50 PM PT
Chinese Automaker Lixiang Automotive Has Filed for a Confidential U.S. IPO, Sources Say
Lixiang Automotive's Ideal One SUV is built on an all-electric, four-wheel drive platform.

Electric carmaker Lixiang Automotive has filed for a confidential U.S. IPO this week, and is making plans to become the second electric automaker behind NIO to launch an IPO in the U.S., Reuters reports. 

The Beijing-based automaker has been working on its IPO since at least last summer. Lixiang hired investment banking firm Goldman Sachs to lead the deal, said the sources. Lixiang is looking to raise $500 million with its U.S. IPO, which is planned for early 2020, according to sources that spoke with Reuters.

Lixiang would become the second Chinese EV start-up to list in New York after NIO Inc's $1 billion IPO in Sept 2018. Although NIO managed to raise $1 billion in its IPO, it fell short of its goal of $2 billion. Since debuting on Wall Street, its shares have fallen more than 40%.

In August, Lixiang Automotive closed Series C financing round worth $530 Million. The funding round was led by Wang Xing, founder and CEO of O2O lifestyle service platform Meituan-Dianping. Xing invested $300 million of his own funds in the round.

The funding round valued the automaker at $2.93 billion, according to a statement from Source Code Capital, one of its existing investors.

Lixiang Automotive, formerly known as CHJ Automotive, was founded by entrepreneur Li Xiang, who was once labeled by the media as one of "China's Elon Musk", along with William Li, cofounder of NIO. The company is one of dozens of EV startups looking to break into China's EV market and challenge Tesla. China is the world's biggest auto market.

As China plans to lead the world in electric vehicle adoption, dozens of new startups are competing to secure capital in China, including Lixiang. Sales of new energy vehicles (NEVs), which include fully-electric and plug-in hybrid models jumped almost 62% in 2018, even as overall auto sales slow in China.

However, many companies in the crowded field of new EV startups in China are faced with reduced government EV subsidies and are being forced to make a strong case to investors about their ability to stand out in the world's largest auto market and become profitable. One of the ways for Chinese companies to  raise funds is to turn to U.S. stock listings, like rival NIO did in 2018.

Lixiang obtained an auto manufacturing license in 2018 after acquiring a traditional carmaker in Chongqing for 650 million yuan. At the time, Lixiang said it would invest RMB 10 billion to build an intelligent automobile manufacturing base in Chongqing with an annual production capacity of 400,000 vehicles. Construction is expected to be completed by 2021.

It started mass production of its range-extended electric Ideal One model in its wholly-owned plant in the eastern city of Changzhou in November, according to the company's official WeChat account.

The Ideal One is built on an all-electric four-wheel drive EV platform equipped with a 40.5kWh battery pack supplied by battery maker CATL. The SUV can be charged to 80% of its battery capacity in 30 minutes using the fast-charging mode.

The sport utility vehicle is priced from 328,000 yuan after subsidies, which compares with NIO's ES6 electric SUV priced from 358,000 yuan.

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